Reverse Mortgages are a special type of home loan for older Americans that lets you convert a portion of the equity in your home into cash without having to sell the home or lose the title. The equity that built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence.
Cleveland Ohio Home Mortgages has outlined below, the most popular Reverse Mortgage product, the requirements needed, the payment options and the benefits of Reverse Mortgages.
Home Equity Conversion Mortgage
The Home Equity Conversion Mortgage (HECM) debuted in 1989 making it the oldest reverse mortgage product and a vast majority of homeowners choose the HECM as their Reverse Mortgage product. HECM's are insured by the federal government via the Federal Housing Administration (FHA).
Benefits
Continue to live in your home for as long as you'd like. Payments from a Reverse Mortgage are tax-free. Payments can be used at the homeowners discretion for items such as travelling, living expenses, paying off debt, a new car, college education for family members or even a new home or vacation property. No negative affect on Social Security or Medicare. Debt can never exceed the value of the home, therefore the homeowner will not be responsible for paying back an inflated amount.
Requirements
The homeowner(s) must be at least 62 years old and have sufficient equity in their single-family home, manufactured home (built after June 1976), condominium or townhome in order to qualify for a Reverse Mortgage.
Payment Options
Homeowners have several payment options when it comes to Reverse Mortgages. Homeowners can opt for a single lump sum payment, a fixed monthly payment for a set period of time or for as long as you live in the house, advances via a line of credit or a combination of these.
If you meet the qualifications above and are interested in learning more about a Reverse Mortgage, contact Tom Reichert for a free reverse mortgage quote.