Reverse Mortgages: Freedom and Independence for Seniors.

Reverse mortgages have been around for a while, but that doesn’t mean everyone knows what they are! In fact, many individuals are completely clueless as to what a reverse mortgage is and how it works. Fortunately, a basic overview of exactly what a reverse mortgage is will help you better understand and decide whether or not it is the best decision for you.

Basically, a reverse mortgage helps individuals who are 62 or older convert some of their equity into tax free income. This is all done with the individual maintaining title to the home and there is never the need to give up the title, sell the home, or even pay an additional mortgage payment. In fact, a reverse mortgage is based on the lender paying the individual a monthly payment than the other way around!

How Does the Lender Make Payments?
The idea of the lender making monthly payments seems pretty odd, but it is definitely one of the options. There are other payment options as well that are popular. One of those is the line of credit. The total amount of money is made available in a line of credit and the individual may access this line of credit at any time. In fact, more than half of homeowners with a reverse mortgage take advantage of the line of credit payment option. Then there is the option of monthly payments where the individual receives fixed monthly payments for their lifetime. Yet another option is a lump sum. Some individuals enjoy this option while others prefer a mixture of several of the options.

Sometimes a combination of payment options is what really works best, but you will need to evaluate your personal situation to decide which option will benefit you most.

How Much Money Will I Receive?
Yet another popular question about reverse mortgages is how much money an individual can receive. The answer is quite difficult though because it depends on many factors. One of these is the individual’s age. Another is how much money is owed on your home or if it is completely paid off, current interest rates, value of your home, and the limit on reverse mortgage lending.

The less you owe on your home, the older you are, and the more valuable your home is will allow you to receive more money. If you are interested in a reverse mortgage you might be wondering if your home will qualify. Most single family homes do as well as condos, town homes, and manufactured homes. If you are wondering about your home then you may speak with a reverse mortgage counselor to find out if your home qualifies or not.

How do I Qualify?
Qualifying for a reverse mortgage is fairly easy if you are over the age of 62 and own your own home. You must have a certain amount of equity in your home to be able to qualify, but other than that there are no other special requirements like medical exams or income.

What Can I use the Money For?
When you qualify and receive a reverse mortgage you can use the money for practically anything! You can buy the car of your dreams, go on a month long vacation, pay off your current mortgage, pay off your taxes, or anything else!