Reverse Mortgages

A reverse mortgage works like a conventional mortgage in that the house is used to secure the loan. To qualify for this type of loan you must be over 62 years old and your home must be mortgage free. You would the cash either in a lump sum or monthly installments. Unlike a conventional loan, you would pay nothing back until the house is sold.

Only a few of home loans are reverse mortgages. Many lenders have never done one. You should try to work with an experienced lender (http://www.katzmortgageteam.com/) that can help walk you through the process with a minimum of confusion.

The best questions to ask revolve around price. How much will the loan cost? How much cash can I get from my house? How much equity will be left after 5, 10 or 15 years?

A good reverse mortgage lender will be able to talk to you about how much these loans cost. There is a fairly steep upfront cost and if you keep the loan for a couple of years, the effective annual percentage rate on the loan will be high.

Inheritance is a very big worry. Although you may not be concerned about leaving behind an estate, your family may worry that they will have nothing left.

The best part of a reverse mortgage is that the property continues to be owned by you, and you will benefit from any price appreciation in the neighborhood.

The paperwork can be complicated, so you may wish to review it with a lawyer before signing. It would be a good idea to have some other family members around to ask all the necessary questions and get to understand the answers.

aa

Email Page | Print Page