Available only to homeowners 62 years or
older, reverse mortgages are home equity based loans that
do not need to be paid back so long as the owners inhabit
the property.
Several different programs and a variety
of payout options are available. One plan enables you
to buy another home using the equity in your current residence.
The amount you can borrow depends on your age and your
equity. In some cases the amount is limited by the FHA.
In general, the older you are, the more you can borrow.
Interest rates depend on the program you choose and typically
are much lower than on conventional mortgages. There are
loan-related fees and expenses.
Unlike the loan balance of a conventional
mortgage, which becomes smaller with each monthly payment,
the loan balance of a reverse mortgage grows larger over
time.
As you receive your payments, the amount
of cash you have left after selling and paying off the
loan -- your equity -- generally grows smaller.
The loan becomes due when you sell or permanently vacate
the home, or pass on. The amount due is equal to the funds
received or the value of the home, whichever is less.
It will never exceed the value of the home.
Repayment can be made with private funds
or by selling the property. Any amount realized by sale
that exceeds the amount borrowed plus interest and other
fees belongs to you or your estate.
Some seniors have used reverse mortgages
to finance long-term care, remain at home or afford essentials
they could not have otherwise afforded.
For more information contact one of the reverse mortgage
specialists listed in this directory or visit ttp://www.fanniemae.com/homebuyers/findamortgage/reverse
Source Fannie Mae &
National Reverse Mortgage Lenders Association
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