Reverse Mortgage - Useful Information About Reverse Mortgages

Have you ever wished that instead of paying a mortgage every month to a lender, that the lender would just pay you? Well, such system actually exists. Unlike traditional mortgages, Reverse Mortgages are designed by the HUD to help homeowners over the age of 62-years-old increase the equity on their home. There are three different types of Reverse Mortgages that can be potentially complicated to understand: FHA-insured Reverse Mortgages, lender-insured Reverse Mortgages, and uninsured Reverse Mortgages. Any individual who is planning on qualifying for a Reverse Mortgage is required to meet with a Home Equity Conversion Mortgage Housing Counselor. This is to ensure that they are aware of all the information regarding Reverse Mortgages.
With an FHA insured Reverse Mortgage, you can decide to have a fixed loan rate, or a credit line option, or you can have both simultaneously. By having the chance of a credit line, can have the monthly payments come to you on a fixed monthly cycle, or you can receive amounts a specific times. The FHA-insured loan protects you by ensuring to continue to pay monthly installments even if your lender defaults.
The Lender-insured Reverse Mortgage can permit you to have a mortgage loan less than the full value of your home, making your debt less when you leave your home, sell it, or pass it on to a beneficiary when you die. This plan can provide larger payments per month than FHA-insured loans. However, the higher the payments are, the lower the equity may be when you leave your home. This loan may also be set at a fixed rate, or an adjustable rate depending on what works best you.
The Uninsured Reverse Mortgage Loan is the only loan that must remain on a fixed rate. This loan should take the most careful consideration when deciding which loan to receive because you decide from the beginning exactly how many years you will remain in the house. Once the number of years you have decided to remain in your house expires, you must begin repaying the loan. You have to plan cautiously for how you will repay the loan at the end of the allotted period.
While you are receiving a Reverse Mortgage Loan, it is also important to remember that you still must pay for taxes and any repairs or damage that is done to your home. The benefit of the Reverse Mortgage Loan is that it can be used to pay for anything in your home. Reverse Mortgages have a myriad of benefits, but they also run the risk of sending someone into debt when the time of the loan expires. Weigh your options carefully when deciding to apply for a Reverse Mortgage Loan, and the benefits could play strongly to your advantage.