Reverse Mortgage Research Paper
There are two basic considerations before one can qualify for a reverse mortgage. First, he/she should be at least 62 years old. Secondly, this individual needs to own a home which he/she is expected to live in. Furthermore, he/she is required to receive client information from counseling services that are Federal-approved before receiving the mortgage loan.
An online reverse mortgage calculator lets you compare different scenarios in relation to mortgage loans. Basically, it has two parts. The first part involves basic information such as your property value. This will be used in evaluating your eligibility for a reverse mortgage. The second step is …show more content…
This mortgage is not a widely innovative financial instrument but a loan product that is designed particularly for seniors. Reverse mortgages are federally-approved mortgage products with a regulatory requirements to insure borrower protection and safety.
In the event that you have a mortgage on your property, it’s possible to use a reverse mortgage to repay the remaining balance. Reverse mortgages have no monthly mortgage payments due to the fact that both the principle and interest is paid at the time of selling your property. The principle grows as the interest accrues depending on your remaining balance. You are not required to repay the loan until you vacate the home.
You can choose between monthly payments, ongoing lines of credit or lump sums. The choice of how the money is distributed solely lies with you. Some homeowners prefer lines of credit because it’s easily and quickly accessible to emergencies. A reverse mortgage loan is favorable because it takes into account the interests of homeowners. Moreover, there are no restrictions as far as the use of your mortgage proceeds is concerned. This is your money and you are allowed to use it without …show more content…
Precisely, a reverse mortgage loan does not affect Medicare benefits, Social Security and is therefore not a taxable income source. In spite of this, monthly reverse mortgage proceeds may impact your eligibility for other programs. Talk to a tax expert to help you determine if, or how, monthly mortgage payments may influence your eligibility for your entitled benefits.
Reverse mortgage pros and cons
Just like any other loan, a reverse mortgage has its own share of pros and cons. Proper and deeper considerations are required before you take your next leap to contact reverse mortgage companies for a deal. Also, different companies offer different reverse mortgage rates variables.
• Source Of Income – Reverse mortgages are a source of income. Taking out equity out of your home by way of a reverse mortgage lets you decide on receiving a lump sum, monthly payments or a line of credit. For people living on fixed amounts of income, they can supplement their income by seeking reverse mortgages and selecting the fixed payments