How Does a Reverse Mortgage Work?

Posted onSeptember 05/2017By

A reverse mortgage is a home equity loan directed specifically at elderly homeowners. A reverse mortgage can assist retirees in order to improve their cash flow, afford larger purchases, or manage unexpected expenses. With a reverse mortgage, monthly payments aren’t necessary. Rather, the bank makes payments for you, which are taken out of your home equity. The loan is paid off once the borrower passes away, sells the home, or moves permanently. With a reverse mortgage, you can also never owe more than the value of the home. Additionally, if there is equity left over after the loan is repaid, you or your heirs will be able to keep the difference. Reverse mortgages are specifically targeted for those over 62. If any of the following apply to you, you may be a good candidate for a reverse mortgage: You own your home outright or have a small mortgage. You’re not…

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Which Types Of Properties Qualify For A Reverse Mortgage?

Posted onNovember 07/2016By

A reverse mortgage allows homeowners to draw on some of their home equity. This is particularly beneficial for seniors who live alone in their own homes. In this arrangement, the recipient receives a monthly allowance from the lending institution. Unlike with a regular mortgage, the recipient does not pay monthly instalments, but is still obligated to pay the costs that come with homeownership, such as insurance, property taxes and maintenance. Qualification for this type of mortgage depends on various factors such as property type. The following types of properties are eligible for a reverse mortgage. Single-Family Dwellings This is the most common type of home that qualifies for a reverse mortgage. Seniors often live alone; therefore, it makes sense to benefit financially from your home without having to sell it. The main criterion to be met is that the home in question is the principal residence. Multi-Family Homes Multi-family homes…

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14 Important Things To Know About Reverse Mortgages

Posted onJune 06/2016By

Extra income is often hard to come by for many older folks. Those who own mortgage-free homes may be thinking about using their home’s equity for a reverse mortgage. There are some things to consider about this type of loan before making your decision. Firstly, to qualify for a reverse mortgage in Canada, you have to be 55 years of age or older. You can get cash from your home without having to sell it. Unlike a conventional mortgage or loan, with a reverse mortgage, you don’t make payments. Interest accumulates, equity decreases and if you ever decide to sell your home, the loan and any accrued interest gets paid back. Looking at the positives and the not so positives will help you make an informed choice about whether this is the right type of loan for you. The pro’s You can get the money in one lump sum or…

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Home Equity Line Of Credit Vs. Reverse Mortgage: What’s The Difference?

Posted onApril 24/2016By

There are a couple of options when it comes to using your home equity as collateral in a line of credit or loan. Home equity credit can be used the same as any other line of credit, while a reverse mortgage allows homeowners to delay further mortgage payments and access their home equity. While both options allow homeowners to access their home equity, there are some notable differences. Home Equity Line of Credit A home equity line of credit is similar to any other loan, except that the borrower uses their home equity as collateral. This is similar to refinancing your home or taking out a second mortgage. There are many reasons homeowners take out home equity credit, such as: To pay off existing debt. To make large payments, such as for children’s education. To renovate. To purchase other investments, such as property. Once you are approved for a home…

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