How a Reverse Mortgage Works

Article submitted by 1st Reverse Mortgage USA.
For more information, they can be reached at 1-877-217-0166, or visit their website: www.1streversemortgageusa.com.

Reverse mortgages operate like traditional mortgages, only in reverse. Rather than paying your lender each month, the lender pays you. Reverse mortgages differ from home equity loans in that reverse mortgages do not require any monthly repayment of principal or interest, as long as you live in the home.

The reverse mortgage's benefit is that it allows homeowners who are age 62 and over to continue living in their homes, without forfeiting their title, and to use their equity for whatever purpose they choose. A reverse mortgage might be used to cover the cost of home health care, to pay off an existing mortgage, take care of property taxes, or the upkeep of their homes.

"1st Reverse Mortgage has built their success and reputation based on the belief that it is all about education. They give seniors all the necessary resources to learn the truth about this program, allowing them the opportunity to make an informed decision," said Barry Scoles, Division Manager of 1st Reverse Mortgage USA®. "We have trained our staff to take the mystery out of this program, and to separate fact from fiction. Their award of Colorado Reverse Mortgage Lender of the Year demonstrates that when you take this approach, seniors have peace of mind in making a decision that best suits their circumstances."

Reverse mortgages allow you to withdraw money from your home equity, tax-free, with no requirement that it be repaid until you die or move out of your home. You can use the money for any purpose. And, as long as you live in the home, pay the property taxes and homeowners insurance, there is no way you can be forced out of your home. The loan might be in the form of a line of credit that can increase over time and be drawn as needed, a lump sum payout, a fixed monthly check for as long as you live in the home, or a mix of options.

Typically there are no out of pocket expenses, as closing costs and other fees can be wrapped into the loan. The reverse mortgage also pays off any existing mortgage, ending that monthly bite on income. The amount you can receive through a reverse mortgage depends on your age, location of the home, interest rates and value of your home. The actual amount is easily calculated and will not vary from one lender to another.