BackWhat is a Reverse Mortgage?
This article was written by David A. Marquardt, Illinois State Director for Senior's Equity Income, Inc., they can be reached at 800-721-8776. or www.seniorsequityincome.com
The Reverse Mortgage Program may be the perfect solution for Senior Citizens experiencing the problem of rising costs in the areas of housing, health care, utilities and all the other living expenses necessary to maintain their current standard of living while attempting to stay in their home.
To qualify for a Reverse Mortgage, all owners on title must be at least 62 years of age or older. Unlike that of a regular mortgage, with a Reverse Mortgage, there are no repayments on the loan for as long as one of the borrowers live in their home. Reverse-mortgage funds can be in the form of a lump-sum payment, an established line of credit, a monthly income check for life or any combination there of these three options. The amount you qualify for depends on factors such as age, home equity and current interest rates. There are no income or credit qualifications for the Reverse Mortgage Program and the borrower or borrowers continue to hold title to the property with a substantial amount of retained equity in the property as well. With the exception of not paying property taxes and maintaining homeowners insurance, the loan only becomes due when the last surviving borrower dies or sells the property. Social Security, Medicare and Pension Benefits are not affected in any manner by the monies you receive from your Reverse Mortgage and are not considered taxable income.
As an added protection to all potential Reverse Mortgage borrowers, all borrowers are required by the Federal Government (HUD) to go through a special counseling session administered by a HUD approved counselor before a Reverse Mortgage application can be submitted for processing. Based on the guidelines set forth by the Federal Government for all Reverse Mortgage lenders, there are three primary categories of fees associated with the Reverse Mortgage Program. The first being the Mortgage Insurance Premium, the second being the Origination Fee and the third being all other costs associated with the closing of the Reverse Mortgage. All fees are rolled into the Reverse Mortgage and settled at closing, thus there are no out of pocket expenses required.