Reverse Mortgage Loans Explained

Reverse mortgage loans are quickly becoming a popular option for many elderly United States citizens. 
If you don not know what these are all about, I will tell you. They transform equity from a home into cold, hard cash, and you do not even have to sell the house or accept any extra monthly payments.

The thing about a reverse mortgage loan is that you do not pay it back until you pass away, get rid of your house, or move into a new house.  So, until you do one of those things you will be receiving money from your lending agency instead of paying money to them.  It sounds really nice, right?  Well, you have to be at least 62 years old to qualify for one of those loans. 

These loans are best for those that have a really nice house but not a lot of retirement income or much income even if you still have a job.   Normally, there are no income restrictions and all the benefits are tax-free. 

There are a three different types of reverse mortgage loans.  You've got single-purpose loans which are great because they cost next to nothing, but they are the least widely available.  These also have income restrictions.  Next, there are HECMs (Home Equity Conversion Mortgages).  An HECM is probably the most costly type of the three types, but there are readily available to just about anyone no matter what your income is or what your medical state is like.  Lastly, there are proprietary loans.  They are similar to HECMs as many factors are involved for how much money you are allowed to receive. 

When getting a reverse mortgage loan, your age, the type of reverse mortgage you choose, the price of your house, where you live, and the current interest rates will all come into play.  It's best to be old, have a nice house, and hopefully you don't owe much.  You can get the most money this way, even though it doesn't make a whole lot of sense.  The best thing about these loans is they are usually not taxable and they will not affect your Social Security or any kind of health care plan!

Your situation may be perfect for a Reversed Mortgage Loan. Ask your mortgage broker if this option is available to you.