The most common senior product – reverse mortgage
June 18, 2008The most common of the products is the reverse mortgage. Here are some common questions that we hear
What is a reverse mortgage?
A reverse mortgage is a financial instrument that allows homeowners over 62 years old to access money that they have built up as equity in their home. They are designed to strengthen a senior’s personal financial situation without a monthly payment burden during the lifetime of the loan.
Does my current mortgage need to be paid off?
No! These loans are designed for owners with equity, but the home does not need to be completely paid off. In some cases we see no money taken from a reverse mortgage, but simply use it to eliminate their mortgage payment. Any mortgage that is in place will have to be paid off as a part of the reverse mortgage transaction.
Can the lender take my home?
No. The home stays in your name, and you have complete control of your property. You are required to keep the property maintained, and pay the taxes and insurance, just like any other loan, but you would do that anyway! As long as the home is your primary residence, you are protected.
What if I can’t stay in my home due to illness or other reasons?
If all the homeowners permanently leave the home, then the loan becomes due and payable. Extended vacations or hospital stays are not a problem. Absences of over 12 months should be discussed with the lender.
