Reverse Home Mortgage Loans

What exactly is a reverse home mortgage and do you qualify?

Reverse home mortgages are exactly what they sound like. A reverse home mortgage is a loan that is the opposite of a traditional mortgage. So instead of making a monthly payment you can actually receive one. Instead of turning your income into equity, you can actually turn your equity into accessible funds you can use immediately. That is the beauty of this type of mortgage loan. In today’s economy where we are all experiencing tight liquid funds to pay for daily expenses, we all could use access to the equity we have spent years building. A reverse home mortgage does exactly that. It gives the homeowner back the funds that have been sitting in equity for years.

Having spent years repaying a mortgage that allowed you to purchase your home, you can now tap into your investment. The equity loan can be taken in the form of a lump sum payment, a regular payout monthly for as long as you live in your home, a credit line available as needed, or a combination of any of the above options. How you plan to use your equity is up to you, whether you use it to pay medical bills, invest in home improvements you have been waiting to do, or just using it to make your monthly expenses less cumbersome, a reverse home mortgage works for you. You worked hard for many years making your mortgage payments on time, paying high interest rates, and budgeting carefully. With a reverse home mortgage you have the opportunity to make your money work for you. You have control on how to take out the money you have put into your home with a reverse home mortgage.

The beauty of this reverse home mortgage is that your do not need to repay until you no longer use the home as your primary residence. Should the reverse mortgage become transferred to an heir later, the bank will work with the heir to make payments until the residence is sold and the estate is settled. This is the opposite of traditional home mortgages and frees the homeowner up to make decisions on how to spend their equity now without worrying about later debt. The reverse home mortgage is peace of mind, in the form of available funds that you have earned in the investment in your home. Make your nest egg work for you!

Reverse Mortgage Eligibility Requirements

In general, to qualify for a reverse mortgage the youngest homeowner must be 62 years old or older and have sufficient home equity (about forty percent).

Reverse mortgage eligibility

Determining whether or not there is sufficient equity in the home is an FHA calculation that takes into account:

• Current interest rate
• Whether the rate will be variable or fixed
• Age of the youngest homeowner
• Location of the property

You can use the Online Reverse Mortgage Calculator to find out if you have sufficient equity and what the loan principal limit would be. Things that do not affect eligibility for a reverse mortgage:

• Income
• Credit history
• Discharged bankruptcy
• Health of the homeowners