What is a Reverse Mortgage, who qualifies for it, and how does it benefit me?There are several benefits that one can enjoy from getting a reverse mortgage. You have the freedom and flexibility to use the money in any way you choose. Since the money from a reverse mortgage is not considered income it will not affect your Social Security or Medicare benefits. As long as you permanently live in the home, you don’t have to pay back the reverse mortgage loan. You can stay in your home and retain home ownership.
There are fou types of Reverse mortgage so depending on your needs, you can select the best type:
Home Equity Conversion Mortgage (HECM)- The Home Equity Conversion Mortgage (HECM) is the oldest and most popular reverse mortgage product. You can draw on a line of credit anytime your want.
Fannie Mae Home Keeper & Home Keeper for Home Purchase - Mortgage investor Fannie Mae developed its own proprietary Home KeeperŪ reverse mortgage to supplement the federally insured Home Equity Conversion Mortgage. This program is also a line of credit.
Financial Freedom Cash Account - Financial Freedom, based in Irvine, CA, introduced a "jumbo" proprietary reverse mortgage product called Cash Account to benefit homeowners living in higher-priced homes valued above the FHA and Fannie Mae lending limits. This loan product is for those who want cash out and have larger loan amounts.
CHIP Reverse Mortgage for Seniors - Created from a senior’s perspective, a CHIP Reverse Mortgage is a unique home equity borrowing opportunity for homeowners in Canada who are age 62 and older.
Reverse mortgages have age requirements. The older you are the more you can borrow. What needs to be considered prior to getting a reverse mortgage is the long term use of the property. Reverse mortages can be costly to get out of. Make sure you have researched all your mortage options prior to signing a reverse mortage.
In a nutshell, what happens with a reverse mortgage is that you will receive funds in a monthly check, or in a one time lump sum payment. The amount of the payments you receive will increase your mortgage balance until you move, sell the home, or pass away at which time the mortgage note will become payable.
Typically, the reverse mortgage is a way for retired individuals to have extra income. Many times, Social Security is the only income they have. Supplementing their income with reverse mortgage income makes sense in some cases.
