Reverse Mortgage. Is It Right For You?
What is a Reverse Mortgage?
A reverse mortgage is a form of equity release (or lifetime mortgage). It is a loan available to home owners or home buyers, enabling them to access a portion of the home's equity. The home owners can draw the mortgage principal in a lump sum, by receiving monthly payments over a specified term or over their (joint) lifetimes, as a revolving line of credit.
Reverse mortgages are available to all US citizens and Permanent Residents age 62 or older with substantial equity in their home. The maximum loan amount you may qualify for is based on the youngest homeowner’s age, current rates, and home value. There is no income or credit score requirements as there are no monthly repayments. You must continue living in your home as your primary residence and continue to pay your properties taxes and insurance.
Is a Reverse Mortgage Right for You?
Without knowing an Individual's particular situation, it's hard to say if reverse mortgage is right them. The best thing a homebuyer can do is get advice from an experienced mortgage professional to determine if a reverse mortgage is right for them. But, here are some basic requirements that you need to know:
•The youngest borrower must be at least 62 years of age
•LTV must be in the vicinity of 62% - a bit higher for older borrowers (maybe 70% age 75, maybe 75% age 85)
•Credit score does not matter
