Mortgage Tips: Answers to 4 Common Questions About Reverse Mortgages

There are many mortgage products on the market that work for all different kinds of homebuyers, but many people have not heard about reverse mortgages and how they can benefit their situation. If you're curious about this type of mortgage and want to know more, here are some questions that will get you on the road to understanding the ins-and-outs of this product.  

What's A Reverse Mortgage? 

The Reverse Mortgage was created in the wake of the 2008 recession and is commonly known as HECM, the Home Equity Conversion Mortgage for Purchase. While this mortgage option is beneficial for those who want to use the equity in their home and defer their monthly payments, it's not a good choice for those who are planning to move in the short-term future. 

Who Can Qualify? 

Since a reverse mortgage allows the homeowner to tap into the equity that they've already accumulated in their home, they need to have a high amount of their mortgage paid off. They must also be 62 years of age or older to qualify. In addition, they should have a solid financial history so lenders will be assured they can pay insurance and property taxes. 

What's Required To Apply? 

Like most mortgage products, because a Reverse Mortgage is a different type of loan, you'll need to apply for it. To do this, you'll need proper identification, address verification and proof that you've gone through counseling to ensure this is the right choice for you. In addition, you'll need to prove that you can make the monthly insurance and property tax payments and you'll have to provide financial documentation to ensure that you're a good credit risk. 

Should I Choose A Reverse Mortgage? 

A Reverse Mortgage can be beneficial if you want to forego monthly payments, but it's worth knowing that this mortgage will be payable if you decide to sell the home or pass away. It's also important to be aware that interest can accrue on the home since you'll be deferring monthly payments. While this may work for you, it's important to talk with a mortgage professional before making a final decision. 

A Reverse Mortgage can be an option for those older than 62, but it's important to be aware of what it entails and what it can do for you before choosing this product. If you're currently considering your mortgage options, you may want to contact one of our mortgage professionals for more information.

Selling Your Home This Summer? Here's Why You'll W...
To Paint or Not to Paint Before Selling Your Home,...

Related Posts

 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Saturday, 17 April 2021
If you'd like to register, please fill in the username, password and name fields.

Captcha Image

By accepting you will be accessing a service provided by a third-party external to https://montanasmostwanted.net/