A reverse mortgage provides funds to a homeowner based upon available equity in the property and not on credit or employment. So a reverse mortgage applicant can have zero income, high debt, and very bad credit, and still potentially qualify. This is a big advantage of reverse mortgages over ...
What are reverse mortgages, and how do they work? Click here for a complete Reverse Mortgage 101 from Longbridge Financial.
Proprietary reverse mortgages are private loans, and aren’t backed by a government agency. If you have a small mortgage balance, and your home has a higherappraised value, you might be able to borrow more with a proprietary reverse mortgage. Like an HECM, proprietary reverse mortgages are mor...
Reverse mortgages have long been marketed to older people who are “house rich and cash poor.” This kind of loan lets you tap into your home equity and get a check each month while remaining in your house. But what sounds like a great idea, in theory, is often terrible in reality. I...
How Do Reverse Mortgages Provide Retirement Income? Perhaps the most attractive aspect of reverse mortgages is the different ways you get your funds. You have several options: A large “lump sum:” is a popular method that allows you to use a large percentage of your equity right away. Peopl...
financial advisors on how to properly use reverse mortgages for elderly clients. A reverse mortgage is traditionally used by Americans over the age of 62 to tap equity they have accumulated in their primary residence. It provides a background on the Home Equity Conversion Mortgage (HECM) for ...
But there are drawbacks. Reverse mortgages reduce the homeowner’s equity and increase their debt. They are a complicated financial product, so it’s important that homeowners fully understand how reverse mortgages work before committing to one. ...
How does a reverse mortgage work? Reverse mortgagesare insured by the Federal Housing Administration (FHA) under the auspices of the U.S. Department of Housing and Urban Development (HUD). They are specifically designed to allow older homeowners to borrow money while not increasing their financial...
In essence, they work the same way mostHECM-insured reverse mortgagesdo. The homeowner gets a line of credit up to the assessed value of the home. They can take it as a lump sum, set up a monthly annuity for life, or choose a series of monthly payments for a number of years. It...
Reverse mortgages offer many payment plans because senior homeowners have different financial needs. No particular option is universally good or bad. For some, the ability to tap a line of credit as needed might work, while others might prefer a fixed stream of monthly income payments. Still, ...