What Are Reverse Mortgage FAQ?

What is a reverse mortgage? This is a loan. Your home is used as collateral. Homeowners do not have to repay the loan while they are living in the home. Most reverse mortgages are available for people 62 years and older that own homes. You must have equity in the home to qualify for the reverse mortgage. A reverse mortgage can help homeowners pay large expenses. Keep in mind that reverse mortgages are very complex loans. How does a reverse mortgage work?

A regular mortgage balance decreases every month. The reverse mortgage balance increases every month. The amount of money you can borrow is based on your home equity, age, and life expectancy. In a reverse mortgage, the loan must be repaid after you die or move out of your home. If you do not repay the loan, the reverse mortgage company will take your home.

Make sure you hire a lawyer if you decide to get a reverse mortgage. A reverse mortgage might work for some individuals and it might not work for others. When you apply for the reverse mortgage, you must get counseling from an approved government agent.

Finally, there are reverse mortgage fees on this type of loan. You will pay a 2% insurance reverse mortgage fee and a 1.25% reverse mortgage loan fee. Loan experts say you should use a reverse mortgage loan as your last option.

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