A reverse mortgage loan also known as HECM (Home Equity Conversion Mortgage) is a best solution for those who have a house but have little cash-in-hand and are struggling to pay taxes, debts and other expenses.
There are few questions that trouble the borrower before he applies for this type of loan. Let’s understand more before you make up your mind:
1. Does my home qualify?
Answer: If the title of the property is in your own name and is a single-family home, you will qualify for a reverse mortgage. Even if it is one to four units home and you occupy one of the units, the home will qualify for reverse mortgage. In addition, if you live in a condominium and it is HUD-approved, it also meets the guidelines to qualify for this type of loan.
2. Who owns my home after I take a reverse mortgage loan?
Answer: You, as a borrower remain the owner of the property as long as you prefer to stay in the home.
3. What happens to my home when I pass away?
Answer: Once you pass away, your heirs will pay back the loan, either by selling out the home or by paying from their personal assets. The heirs can only transfer the title of the property in their name once they pay back the full amount back to the lender.
4. How much cash can I receive?
Answer: The amount is based on the borrowers’ age, the prevailing interest rate at the time while applying for the loan, the appraised value of the home. Do remember, the older you are, the more you will be entitled for your property. The minimum eligibility criterion is 62 years of age.
5. What are the modes of payment?
Answer: Equal monthly payments, line of credit, full lump-sum amount and a combination of all the options are the modes of payment you can choose from.
There are experienced and reliable reverse mortgage lenders that guide you the right option as per your requirements. Get in touch with one of the lenders to make your life easy.
