Posted on: 17th Aug, 2009 04:08 am
what is Reverse Mortgage means? What are its types?
Hi,
A reverse mortgage is a good option for the elderly people to tap the equity in their homes. Unlike a regular mortgage it doesn't require them to make any monthly payments. Instead, the borrower receives a payment from the lender. The loan is repaid when the borrower dies or sells the property or leaves it.
There can be 3 types of reverse mortgage. One of them is Single Purpose Reverse mortgage. It is offered by the Govt. to low and moderate income people to help them property taxes, improvements etc.
The most common type of reverse mortgage is the Home Equity Conversion Mortgage. This type of loan is insured by HUD.
The last type of reverse mortgage is proprietary loans. They are more or less similar to the HECM. But unlike an HECM, it does not require the borrower to meet with a counselor before applying for the mortgage.
A reverse mortgage is a good option for the elderly people to tap the equity in their homes. Unlike a regular mortgage it doesn't require them to make any monthly payments. Instead, the borrower receives a payment from the lender. The loan is repaid when the borrower dies or sells the property or leaves it.
There can be 3 types of reverse mortgage. One of them is Single Purpose Reverse mortgage. It is offered by the Govt. to low and moderate income people to help them property taxes, improvements etc.
The most common type of reverse mortgage is the Home Equity Conversion Mortgage. This type of loan is insured by HUD.
The last type of reverse mortgage is proprietary loans. They are more or less similar to the HECM. But unlike an HECM, it does not require the borrower to meet with a counselor before applying for the mortgage.
A reverse mortgage is used to cash out equity from there homes . Reverse mortgage is a special mortgage offered to seniors. In reverse mortgage custome does not pay payment as in every loan as monthly basis but he receives payment in montly basis or lump sum payment, or added to their social security.
Reverse mortgages are available to seniors over 62, who are homeowners and occupy their homes.Home Owners are responsible for taxes,property insurance, maintenance and repair. They also remain in ownership while they occupy the home.
Reverse mortgages are available to seniors over 62, who are homeowners and occupy their homes.Home Owners are responsible for taxes,property insurance, maintenance and repair. They also remain in ownership while they occupy the home.
There is no income requirement in reverse mortgage. The amount of money a senior can receive from their equity depends mostly on age. Higher the age higher is amount of equity. A 65-year old senior may be getting around 30% of the equity of their home; a 90-year old borrower may receive 80% of their equity.
With a reverse mortgage, no debt is transferred to the estate. Even if the reverse mortgage premiums exceed the appraised value at a certain point, the borrower will never owe more than they originally borrowed.
The reverse mortgage is paid off by three types
1) when the borrower moves out permanently.
2) sells the house
3) passes away.
The reverse mortgage is repaid either in cash or through transfer of the deed to the house to the lender.
With a reverse mortgage, no debt is transferred to the estate. Even if the reverse mortgage premiums exceed the appraised value at a certain point, the borrower will never owe more than they originally borrowed.
The reverse mortgage is paid off by three types
1) when the borrower moves out permanently.
2) sells the house
3) passes away.
The reverse mortgage is repaid either in cash or through transfer of the deed to the house to the lender.
Home equity conversion mortgage is most commonly used reverse mortgage.