Most people who hear about Reverse Mortgages have one or two idea who should be the target
for this “scary” mortgage. You should either be broke and don’t care how you get money, as long as it is legal, or you have a need to do something that looks good, even if you probably won’t have enough money to repay the house when it comes do. Not even close!
If you are an owner of a property that is your primary residence and are 62 or over you can apply for a reverse mortgage. You will end up, if you qualify, with a new mortgage on your property and
most likely a little or a large amount of cash. You do not make any payments on your house or the money you receive until the last owner of the loan leaves it permanently. Again no payments are made while you are living there, but interest is accruing on your new mortgage.
When you leave you can will the property to your heirs, sell the property and keep the excess profits over the loan or if the loan is more than the equity in the house you can send the lender the keys and walk away. THERE ISN’T A DEFICIENCY JUDGEMENT ON THIS LOAN! That is right.
The lender (U.S. Gov’t) is actually taking the risk, not the borrower.
I have a perspective client that wants the loan because he wants to retire. He works part time
to earn enough to keeps his payments on his house and his bills. The Reverse is just what the doctor ordered. If you have a current mortgage you can stop paying the monthly payments and only pay the property tax and the insurance policy. Those are a fraction to this client versus his total bills.
The final thoughts are simple: if the house doesn’t increase in value you are not getting hurt.
If it does increase in value you get the increase. Your covered either way!
It is time to join those who realize how good this option really is!!