A reverse mortgage works by letting homeowners who are at
least 62 years old borrow from their home’s equity without the being required
to make mortgage payments every month. As the borrower, you may opt to take the
funds in a lump sum, structured monthly payments, or line of credit. The loan
repayment will be required once the last surviving borrower leaves the home
permanently.
How Reverse Mortgage Works
- - You can access a part of the equity of your home
- - The percentage will be based on the age of the youngest borrower
- - You will not make mortgage repayments every month
- - The funds you get are tax free and can be used for anything
- - The loan will be repaid after your death or if you decide to sell your home.
- - The remaining equity will belong to your heirs
How Is Reverse Mortgage Different?
You might be wondering how a reverse mortgage is different
from a traditional loan, or what they refer to as a forward loan, in that it
works the other way around. The traditional loan is a rising equity loan,
falling debt while the reverse mortgage loan is a rising debt loan, falling
equity.
So when you make payments on a conventional loan, the amount
that you owe will be reduced and the equity that you have in your home
increases as time goes by.
With a reverse mortgage loan, you will not be required to
make regular payments, so when you draw out the funds and as interest piles up
on the loan, the balance will grow and your equity position in the house will
become smaller.
You never have to make a payment on a reverse mortgage loan
and there will be no prepayment penalty of any sort. This means you can make
payments any time, including and up to payment in full, without having to deal
with penalty.
How Much Will You Receive?
The amount you get in a reverse mortgage Columbia will be
determined differently compared to a standard mortgage. You will not hear
people mentioning things like loan to value ratio just like you would on a
conventional loan.
On a conventional loan, the lender will agree to lend a
specific amount that is identified as a percentage of the home’s value. This
could change according to different factors, like the credit of the borrower,
the needed loan amount, as well as the type of property.
The factors that dictate the amount you get includes the age
of the youngest borrower, the home value, HUD lending limit, and interest
rates.
Other factors that affect the loan amount include the costs
to get the loan, existing liens and mortgages, and any remaining cash will
belong to you or your heirs.
Reverse Mortgage Payment Options
There are different ways you can choose from to take the
money available on your reverse mortgage.
You can get the reverse mortgage payment through a lump sum, a line of credit, a
payment for a specific amount and period, also called term payment, and a
guaranteed payment for life or tenure payment.
Call Reverse Mortgage Specialist if you would like to know if this type of loan is your best option.
David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/
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