One of the most common questions that people ask about reverse mortgages, is “How does a reverse mortgage work?"
This is a smart question because reverse mortgages actually work very different from other types of loans or mortgages, so it is important that you understand what you give and what you get exactly before applying for your loan.
A reverse mortgage is a special loans that lets you convert a part of your home equity into cash. So you'll quickly receive a large amount of cash in your hands.
The best part? You don't have a pay anything back for years and years until you decide to sell your house.
Yes, that's right. Even if you decide to stay at your home for 50 more years, no one will come asking you for any money.
This means if you need a large sum of cash that you can't find in any other way, a reverse mortgage may be for you.
But before thinking a reverse mortgage is everyone's dream becoming reality, there are some important dangers of reverse mortgages that you want to be aware of.
How Much Money Can I Borrow with a Reverse Mortgage?
There are some various factors that determines how much money you can get, but some of them are your age, your home value, and some other things.
For example, you can never borrow more than your home's current value.
The good thing about this type of loan is that the money you get is totally tax-free. Also you are free to spend it on anything you want - unlike other loans that when you get a car loan, for example, you must spend it on buying a car.
Even though a reverse mortgage has many benefits for you as a way to get a large amount of cash easily and fast, there are some other factors to consider before choosing to get this loan.
One of the most important things is reverse mortgage pitfalls that you must be aware of, to protect yourself and save money.
Want to get a reverse mortgage? How about you calculate your cash and expenses using this easy, free reverse mortgage calculator ?
It will help you save a lot of time instead of doing it by hand, and also helps you choose the best and most affordable mortgage companies.