|
Points Explained |
 |
| |
What are morgage points and when, if ever, does it make sense to pay them? |
|
|
Learn More  |
|
|
|
Fees Explained |
 |
| |
What are the 'real' costs of my Morgage? This will help explain exactly where your money is going -
and where it shouldn't be going...
|
|
|
|
Learn More
|
|
|
|
Morgage Glossary |
| |
Become an informed borrower by familiarizing yourself with common terms used throughout
the morgage process...
|
|
| |
|
|
|
Reverse Morgage Information
A Reverse Morgage is a type of loan wherein a homeowner doesn't have to make a single morgage payment for the rest of his or her lifetime. This is because all amounts due are deferred until after the homeowner dies, the house is sold or vacated by the owner. There is an age requirement for this loan and it is currently set at 62.
How does a reverse morgage differ from a typical morgage? In a typical morgage one makes a monthly payment that is 'amortized' over a set term---usually 15 or 30 years. When a loan is 'amortized' it means that each month a payment is made to both principal and interest in such a way that the loan is fully paid off by the end of the term. However, in a reverse morgage a monthly payment is not made and all of the due interest is simply added to the loan balance (so the debt on the property increases each month).
What happens at the end of the loan? When the homeowner sells the home, moves out of the home for at least twelve consecutive months (including moving into assisted living homes), or dies the loan will end. At that time the loan can be paid off by selling the home or the heirs of the estate can refinance out of the loan into a new one. If the home is sold and the proceeds are greater than the balance owed on the home then the owner receives the extra money (or if the owner has died then the heirs receive that additional money). If the proceeds aren't sufficient to cover the loan amount then the bank must take the loss (so the homeowner's estate won't be left with an additional debt).
Are there alternatives to getting a Reverse Morgage? A few alternatives that can serve a similar purpose (while avoiding the typically high fees involved in reverse morgages) are the following:
Obtain a 'cash out' loan and place that cash in an interest-bearing account that is used to make payments on your home
Doing a 'sell leaseback'
Intra-Family loans
Simply selling and moving into a less expensing home
|
|
Reverse Morgage Information - Rates, Info & Details About Reverse Morgages 
We don't sell your information to multiple morgage brokers and call it 'competition'
