Home Equity Loan-Reverse Mortgage-Is There One in Your Future

J Krohn
 


Visitors: 133

Reverse mortgages have gotten a lot of publicity lately and will probably get a lot of press in the future as baby boomers near retirement age. What are they? Who can use one? Is there a reverse mortgage in your future?

WHAT ARE REVERSE MORTGAGES A reverse mortgage is a home equity loan or line of credit that is secured by the equity in your home. You do not repay as long as you live in the home. The reason it is called a reverse mortgage is because it is the opposite of a regular home equity loan where you reduce debt and build up equity. In a reverse mortgage you reduce equity and build up debt. That is where the money comes from.

WHO CAN USE REVERSE MORTGAGES Basically anyone who is over age 62, owns and lives in their own home and has paid off at least 60% of the loan can apply for a reverse mortgage. There is no proof of income requirement.

USES FOR PROCEEDS The money can basically be used any way you wish. Frequent uses are travel, home improvements, medical expenses, and supplemental income. The amount you may receive depends on a lot of factors one of which is how you receive the money. Your age, the location of the home, interest rates, the type of program you select, and of course the values of the home are some of the other variables.

OPTIONSYou may select to get monthly payments, a lump sum upfront, or a line of credit that would allow you to draw on the account as you needed it or a combination of the three. If you select a line of credit with a “growing" credit line your available balance earns interest. A withdrawal at the beginning of the plan could be offset by the interest earned.

Since you still own the home you are responsible for taxes, insurance, and upkeep. The loan has to be repaid at the death of the owner, when it is sold, or if you move. The proceeds from the sale of the house can be used to pay off the loan.

Reverse Mortgages have become increasing popular in the last several years and will only grow in popularity as the baby boom market looks for ways to finance their retirement.

AARP has some very good information on reverse mortgages at http://www.m-o-r-t-g-a-g-e-r-a-t-e.com and http://www.h-o-m-e-e-q-u-i-t-y-l-o-a-n.com Homeowners should check out http://www.h-o-m-e-s-e-c-u-r-i-t-y.com

(435)

Article Source:


 
Rate this Article: 
 
Understanding Reverse Mortgages - The Home Equity Conversion Mortgage
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

Reverse Mortgage Home Equity Loan-Life Made Easy

by: J Krohn (November 08, 2006) 
(Real Estate)

Home Equity Loan - A Reverse Mortgage Could Provide a Comfortable Retirement!

by: Charles Essmeier (April 29, 2005) 
(Finance/Mortgage Refinance)

Home Equity Loan - With a Reverse Mortgage, Your Home Pays You!

by: Charles Essmeier (April 29, 2005) 
(Finance/Mortgage Refinance)

Home Equity Loan Comparison - Access Your Home's Equity Through a Second ..

by: Carrie Reeder (October 20, 2005) 
(Finance/Mortgage Refinance)

Nebraska Home Equity Loans - Can You Pay Off a Mortgage with a Home Equity Loan?

by: Jane A. Hale (November 17, 2006) 
(Real Estate)

Second Mortgage Analysis - Fixed-Rate Equity Loan Versus a Home Equity Line of .

by: Maria Ny (June 05, 2006) 
(Finance/Debt Consolidation)

Home Equity Line of Credit, Bad Credit Home Equity Loan and Home Equity Mortgage

by: Ken Bissonette (December 18, 2005) 
(Finance/Loans)

The Reverse Mortgage - An Alternative Way To Use Your Home Equity

by: Joseph Devine (March 07, 2008) 
(Finance/Home Equity Loans)

Mortgage Information - Refinancing? Second Mortgage? Home Equity Loan? ..

by: Carrie Reeder (June 07, 2005) 
(Finance/Mortgage Refinance)

Understanding Reverse Mortgages - The Home Equity Conversion Mortgage

by: Kathy Coffey (October 20, 2008) 
(Finance/Mortgage Refinance)