Reverse Mortgages Can Benefit Elderly

Reverse Mortgages Can Benefit Elderly
Reverse mortgages are available through lenders insured by the​ federal government and can be of​ great benefit to​ those who are eligible to​ apply .​
There are three types of​ reverse mortgages currently available in​ the​ United States,​ including Home Equity Conversion Mortgages (HECM),​ Fannie Mae (FNMA) Home Keeper and Financial Freedom Cash Accounts .​
the​ basic premise of​ a​ reverse mortgage is​ that it​ allows homeowners over the​ age of​ sixty-two to​ convert part of​ the​ equity in​ their homes into tax-free income without having to​ sell the​ home,​ give up the​ title to​ the​ home,​ or​ take on​ a​ new monthly mortgage payment .​
the​ reverse mortgage is​ titled as​ such because lenders pay the​ borrower fixed payments or​ a​ lump sum over time as​ opposed to​ a​ traditional mortgage arrangement .​
Eligible property includes single-family dwellings,​ manufactured homes built after June 1976,​ condominiums and town houses .​
The process for applying for a​ reverse mortgage is​ more involved than with a​ traditional mortgage .​
Aside from meeting the​ age and property type restrictions,​ applicants must discuss the​ loan with a​ counselor employed by the​ U.S .​
Department of​ Housing and Urban Development prior to​ signing .​
There are five different types of​ payment methods for each United States government insured loan available,​ allowing for flexibility to​ meet the​ needs of​ the​ applicants .​
These include monthly,​ quarterly,​ semi-annual and annual payments to​ the​ borrower for a​ fixed number of​ periods or​ a​ lump sum that can be invested .​

Repayment terms also vary by the​ interest rate,​ as​ with traditional mortgages .​
Those who choose variable rate mortgages will pay over one percent less since the​ risk assumed by the​ borrower for agreeing to​ monthly adjustable rate calculations can greatly increase their risk over the​ life of​ the​ mortgage .​
the​ total of​ the​ mortgage is​ due when the​ house is​ no longer occupied by the​ borrower and can be paid by the​ borrower or​ by his or​ her heirs in​ the​ event of​ death.
While many consider borrowing to​ be a​ bad idea later in​ life,​ reverse mortgages simply allow seniors to​ enjoy the​ equity they have already established without carrying the​ risk of​ having to​ meet monthly payments while on​ a​ reduced or​ fixed income .​
This can substantially increase the​ quality of​ life for many older Americans and allow them to​ enjoy the​ fruits of​ their life long labor.

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