Benefits Of A Reverse Mortgage
Homeowners over the age of 62 are able to take advantage of what is known as a reverse mortgage to add to their monthly income.
A reverse mortgage allows the homeowner to take advantage of the equity in their home by converting it into tax-free income. The homeowner is able to do this without having to sell their home, give away the title, or incur a new mortgage payment.
The process is known as a reverse mortgage because the flow of money is reversed. Instead of the homeowner paying the lender, the lender pays the homeowner.
Once the homeowner has been approved for the reverse mortgage, there are several options for how the money can be received.
A lump sum payment, fixed monthly payments, a line of credit, or some combination of the tree are the options available. Most homeowners choose to obtain a line of credit because it allows the homeowner to draw on the loan whenever he or she chooses.
When the homeowner takes the reverse mortgage as a line of credit, the unused balance has a growth feature. This growth feature is not interest accruing on the house.
Instead, growth in the account is based on the assumption that your home has appreciated over a certain period of time. Not all reverse mortgages have this growth feature. Only those mortgages obtained through the FHA Home Equity Conversion Mortgage program have the growth feature.
The amount of money you obtain from the reverse mortgage depends on several factors. These factors include your age or the age of the youngest spouse, the appraised home value, the lending limit in your area, and current interest rates.
The amount you can receive is maximized by an older age, a higher value of the home, and a lower amount owed on the home.
Several different kinds of homes can qualify for a reverse mortgage. Singe-family homes, manufactured homes built after June 1976, 2-4 unit properties, townhouses, and condominiums are all eligible for a reverse mortgage. Most co-ops are not eligible for a reverse mortgage.
A reverse mortgage can be used for virtually anything you deem appropriate. Once you are approved for and have received the funds, the decision to use the money is entirely yours.
Even if you have an existing mortgage, you can qualify for a reverse mortgage. The only stipulation applying is that your existing mortgage must first be repaid.
You can do this using the reverse mortgage. Whether you are able to completely pay off your existing mortgage with the reverse mortgage will depend on the amount of the reverse mortgage for which you qualify.
In some cases, you will be able to completely pay off your existing mortgage without having to supplement with any of your own funds.
Once you receive a reverse mortgage, it does not affect your existing government assistance like Social Security or Medicare.
In some cases, the proceeds from the reverse mortgage could increase your income and impact your eligibility for Medicaid. To avoid losing Medicaid eligibility, you will need to spend your proceeds immediately.
Related Tags: mortgage, real estate, equity, reverse mortgage, home loan
Claim A Free e-book that will show you how you can claim free land and real estate: http://www.freelandproperty.com Your Article Search Directory : Find in Articles
Recent articles in this category:
- 5 Reasons to Buy Jasper Real Estate
Jasper is a small town in North Georgia and it is growing rapidly. Since North Georgia Foreclosures - Ellijay Real Estate
Ellijay Georgia has always been known for it's outdoor activities and seasonal festivals. Downtown E - How to Deal With Blocked Drains
A blocked drain is an occurrence that happens eventually to all households. You may have experienced - The Benefits of Hiring a Plumbing Consultant
Your dream home may not always be brand new, with fresh paint and home essentials. There are certain - The Worst Mistake You Can Make When You Apply to Rent a Home
A whole new class of people has become renters and potential renters in America during the last thre - State of Individual Real Estate Markets
Everybody is well aware of the hit that the real estate market has taken over the past three years. - Thoughts on Avoiding the Landlord Trap
I've heard several people say they would never invest in a multifamily rental property because they - An Idea to Increase the Bottom Line of Your Investment Property
Are you pretty sure that you've already maximized the income coming from your property? If you've cl - Finding the Value of a Piece of Investment Real Estate
There is a lot of confusion about how much investment property is really worth. We'll look at three - Arkansas Land For Sale - Search Engine Optimization and Your Website
If you have Arkansas land for sale and are interested in advertising it on your website I have a few
Most viewed articles in this category:
- How High Did Home Prices Really Go
The U.S. Census Bureau released data on Tuesday that revealed where the nation's hottest markets wer - New Homeowners Tips for Household Safety
With so many items on their ¡°buying a home¡± checklist, few homeowners take into considerati - Truth About VA Foreclosures
Many people now days are finding themselves out of work and not being able to make the mortgage paym - Avoid Rookie Real Estate Investing Mistakes
When Robert Kiyosaki, author of the Rich Dad book series, bought his first property he was, of cours - Finding The Perfect Roommate On Craigslist
Craigslist, Roommates, and The Concerns Craigslist is "great" when it comes to looking for housing - The Forgotten Secret To Selling Property - Simple, Quick And Cheap
Why spend big dollars trying to get people to drive a long way to see your house, when your best pro - Get Amazing Results Selling Real Estate Online
This is the age of the internet. Why not take advantage of the widespread use of the internet to ad - Dallas Real Estate Information
In the United States, Dallas is considered as the second leading state according to the area. If any - The Largest Private Equity Indian Real Estate Deal
In the largest private equity deal won by the real estate sector, Morgan Stanley Real Estate has inv - Fractional Real Estate Ownership
Fractional ownership of vacation ski condos is growing in popularity. Park City Utah a popular ski t