When getting into any kind of financial commitment like a loan or mortgage it is perfectly normal to have a lot of questions. You should never hesitate to ask whatever questions you have in order to understand what you are getting into. One type of financial agreement that may be particularly confusing is the reverse mortgage. Here are some of the most commonly asked questions.
What Is a Reverse Mortgage?
The first question is what this kind of mortgage is. It is a type of home loan that allows you to convert some of the equity in your home into cash. Instead of paying a monthly mortgage payment, you are actually paid monthly. If you are retired, this comes in very handy to cover your monthly living expenses.
Am I Eligible?
You may be wondering whether or not you qualify for a reverse mortgage. In order to be eligible, you have to be a homeowner 62 years of age or older. You have to own your home in full or have a low mortgage balance that can be paid off with proceeds from the reverse loan. You also have to have adequate finances to pay for property charges such as taxes and insurance, and you have to live in the home. Before you receive the loan, you will be given consumer information from a counselor that you must read over and get an understanding of. The resources required to be given to the proposed lender before the loan goes through is used as a means of protecting the lender from fraud.
If you are considering getting a reverse mortgage and still have questions, feel free to find a lender or counselor to get more information for free or at a low cost. Ask all the questions you need before diving in. It is an important step, and there is no shame in working to make sure you are prepared.
