A reverse mortgage is only for senior citizens whose are 62 years and older. In traditional mortgages, you make payments to the lender, where as in reverse mortgage the lenders will pay you.
Usually the amount is given based on the market value of the house and the equity owned by the senior.An online reverse mortgage calculator can determine the total sum of reverse mortgage, depending upon the value of your home in the market. The value of your home in the market will be working as a constraint. Both amounts you owe on a previous mortgage and amount you get from a reverse mortgage cannot change the value of your home in the market. And this is the major advantage in reverse mortgage.
Now we will see some of the advantages and disadvantages related to reverse mortgage.
There are some fees and also qualification that should be met first to get the reverse mortgage. As we discussed above, the borrower should be of 62 years or older. In addition to this, the house be owned by the borrower, and the borrower can have a small amount of pending previous mortgage on the house. There should be insurance for the home, and also the home should be in a good condition. The lenders individually may have some conditions that should be met to get the reverse mortgage.
The loan is the combination of lender carrier fee and also interest that you should pay. There is an option for you about how and in what form you can get the payments and you can also have option how and by what time the mortgage should be paid off. If you have the amount, then the mortgage can be paid off earlier also. If you pass away before the payment of mortgage, then your successors will continue the payment of the mortgage or they can sell the house and clear off the mortgage.
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