What Is A Reverse Mortgage? A reverse mortgage or other known as lifetime mortgage is a loan available to seniors, and is used to release the home equity in the property as one lump sum or multiple payments.

The homeowner’s obligation to repay the loan is deferred until the owner dies, the home is sold, or the owner leaves.

What are the Requirements of Reverse Mortgage? To qualify for a reverse mortgage in the United States, the borrower must be at least 62 years of age.

In a reverse mortgage, the home owner makes no payments and all interest is added to the lien on the property. If the owner receives monthly payments, or a bulk payment of the available equity percentage for their age, then the debt on the property increases each month.

These sessions are free of charge and given by a non-profit organization. This allows another opportunity to ask all the necessary and proper questions. During the loan and the remainder of its life, you cannot be asked to leave the property, as you still are the owner and deed holder.

The estate will be settled in the normal way, the property will be passed on to the heirs, and they can refinance out of the reverse mortgage. If they decide not to reside in the property, they can sell the unit, pay off the reverse mortgage, and keep the balance of the monies of the estate. They have one year, from the passing of the note holders, to settle the mortgage.

If the mortgagor fails to pay any of the installments or the interest, the whole remaining unpaid amount shall immediately due and payable at the option of the mortgagee or the lender.

The size of your loan will depend on your age, the kind of loan you want, the value of your home, and the current market interest rates.

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This entry was posted on Thursday, October 29th, 2009 at 2:39 am and is filed under Real Estate.