One way to understand what reverse mortgage is, is to understand forward mortgage.
A forward mortgage is the mortgage you know, you borrow money, the loan is secured by your home and you pay it back.
For the reverse mortgage, you also borrow money, the loan is secured by your home, but you don’t have to pay it back with money out of your pocket. Rather, the loan is paid by the equity in your home; the mortgage balance increases over time.
You need to be at least 62 years old to apply and take a counseling class to obtain a certificate verifying you completed the reverse mortgage counseling.
You will need approximately 50% equity in your home. You can stay in the home the rest of your life, and the lender will not call the note due if the loan balance exceeds the value of the home. If you are married, and your spouse did not qualify for the loan due to being under 62 years old, your spouse may continue living in the home if you predecease.
Reverse mortgage is a good loan if you are on a fixed income and are having trouble making your payments.
Give us a call and we can go over whether it is right for you.
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Counsel Mortgage Group®, LLC
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John Rapasky is the President of the Counsel Mortgage Group®, LLC. Copyright © 2017 Counsel Mortgage Group®, LLC.