What is a reverse mortgage loan?
If you are aged 62 or over, a reverse mortgage loan is an excellent way of tapping into home equity and receive money from your home. Instead of making payments to a lender, the lender makes payments to the borrower. The money can be withdrawn in a single lump sum or received in monthly payments, depending on the arrangements made in the reverse mortgage loan agreement.
There are a few conditions in addition to the age requirement. You must own your home and it must be your primary residence, and there must not be any other debt against the home. The amount of the reverse mortgage is based on the value of the home, so credit history is not taken into account – although the age of the borrower, interest rate, and loan fees, do factor into the amount.
You do not give up the title or deed to the home at any point and the loan amount cannot exceed the value of the home. The amount of money you receive is tax free, with many people choosing to pay for home repairs or medical bills with the money.
What are the benefits of a reverse mortgage loan?
FICO scores do not apply and credit history is not taken into account. The existing mortgage will be paid off. The money can be used as you see fit and is tax free. You can maintain your current lifestyle and it can be a regular source of income to supplement retirement