By Aaron Almus
If you have ever thought about financing into a reverse mortgage but are afraid because of all the negative reverse mortgage information on the net today, then you will want to read this article. As with anything on the net, there is a lot of misinformation. Whether that's because of poor research or motivation to sell something, I can't be sure. What I can be sure of are the facts of reverse mortgages.
In my previous career I spent years in the mortgage industry and personally sold over $100 million in financing. I don't say this to tout my own horn, just so you know that I have a bit of knowledge on this subject. This article will cover three facts of reverse mortgage information: the requirements, benefits and protection.
One of the great things about reverse mortgages is their lack of requirements. Unlike a traditional mortgage, such as a 30 year fixed loan, a reverse mortgage has very little requirements. For a traditional mortgage you have to qualify based on your income, assets, employment and credit. There are no income, asset, employment or credit score requirements for a reverse mortgage.
To obtain a reverse mortgage there are only four areas the bank will look at: your age, equity, location and government loan history. You have to be 62 years or older to qualify for a reverse mortgage, no exceptions. This is why this loan is known as a 'senior loan' because you have to be a senior to get one.
The other important qualification is the equity in your home. You have to have substantial equity to start the reverse mortgage process. If you carry a mortgage and only have a quarter of the equity in the home you cannot obtain this loan. Generally, you can only carry a small lien on your home. So if your home is not paid off and has a large existing lien you will not qualify for a reverse mortgage.
The bank will also need to appraise the home and make sure you have not gone into default on a previous government loan. If you had defaulted on a government loan your application for a reverse mortgage will be denied.
The benefits are many. Like all loans, the reverse mortgage was developed to fill a need in the marketplace. Retiring, many seniors find themselves in an uncomfortable position with the more time to spend money but with less money coming in. Most are on fixed income from pension, investments and the government. They look for alternatives and the best one is usually the equity in their homes.
Unlike a traditional mortgage when you take out a reverse mortgage you don't have to make monthly payments back to the bank. This is great for those homeowners that have limited income but would like to take out some of the equity in their home without putting it right back every month.
A reverse mortgage allows a homeowner to take out a lump sum or receive monthly payments for a certain time period or life of homeowner. It can also be set up as a line of credit. The loan does not need to be paid back to the bank until either the homeowner moves and sells the home or in the event of death. This is the biggest benefit of this type of loan.
When you finance a reverse loan you continue to retain Title just like you did with your traditional mortgage. This is the biggest myth on the net; that the bank owns the home. These loans are done through HUD's Federal Housing Administration (FHA) and have strict guidelines to protect the homeowner.
Click Here to Discover the Truth About Reverse Mortgage Info
For more information and guides on reverse mortgages visit http://www.reverse-mortgage-help.info/ where you will find this and much more, including reverse mortgage pros and cons, costs, lenders, how a reverse mortgage works.
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