If you are thinking about a reverse mortgage; it is important to have some vital information about the process. The reverse mortgage can be used to help you access some of the equity in your home. Many of people use it to improve their homes, meet some unexpected expenses or even to supplement social security.
The information about the mortgage is vital when you are making your decision whether it is fit for you. The first step is to know what it is before you decide whether it is what you want. A reverse mortgage is a special type of house loan that enables you to convert some of the equity into cash. It differ with the other loans in that you do not have to repay the loan until you stop using the house as your residential home or you do not meet the obligation of the initial mortgage repayment.
The other question you may want to ask is who qualifies for such a loan? The first thing is to be a homeowner and one who is sixty-two years of age and above. You need to either be an outright homeowner or with a low mortgage balance. The other requirements are that you must be living in the house, the balance should be low such that is can be settled with the reverse loan, and also you must show evidence of income that will enable you to pay the new loan.
For you to qualify for this kind of loan is not a must that you used insured mortgage to purchase the home. You may be asking yourself whether your home is among those that can qualify for the kind of loan. You need to be a single family occupier of the home for you to qualify. Are you asking yourself the different between a reverse mortgage loan and a home equity loan.
With equity loan, the borrower is required to pay both the principal and the interest every month. It also includes the payment of taxes, utilities, and insurance premiums. If you have to sell your house, you must be prepared to pay all the mortgage at the point of selling. That means you cannot sell the house and transfer ownership before the loan is fully repaid. If you have left the house to your spouse or heir, then on selling the house, they will need to repay the loan and the remaining balance shall be for their use. Many factors that can influence the amount that you need to borrow. One of the elements is the age of the borrower. The no eligible spouse is another factor that can affect the amount.