If you’re
interested in a Reverse Mortgage, there are a few pieces of information you
should know to make sure you make the right decisions and take the right steps
to put yourself in the best position possible. Unfortunately, there is a
significant amount of inaccurate or misleading information circulating due to
the recent boom in popularity of reverse mortgages. The downturn in the economy
led to a storm of people looking for a way to make use of the equity they’ve
built up in the homes over a period of several years. As with any trend, many
lenders were ready and waiting to take advantage of those individuals not fully
aware of what a reverse mortgage was or what it entailed. To help you avoid
that pitfall, let’s go through some of the facts about reverse mortgages.

Reverse Mortgage Facts

You might be
asking yourself why a reverse mortgage has become such a popular phenomenon
among modern homeowners. The main reason is that it allows you to tap into your
untouched equity as collateral for a loan with much lower interest than you are
likely to find through other means. Another great thing about the reverse
mortgage system is its incredibly lenient qualification requirements. In fact,
there are almost no credit or income requirements at all. If the homeowner is
at least 62 years of age, you’re already good to go in the process. The only
other big requirement is that the homeowner must own the home outright. At this
point you might be saying to yourself that it sounds too good to be true, or
that there must be some catch that will hurt your loved ones who will inherit
your estate. That is absolutely wrong.

The federal government has made it a point to protect the loved ones of reverse mortgage
owners in order to ensure that there is confidence in the system that the
inheritors of the estate won’t be overburdened by debt once the estate is
passed on. In fact, upon the passing away of the homeowner, you won’t even be
required to pay off the balance immediately. Instead, you have the option of
selling the home at that point, leaving you worry-free with regards to
immediate repayment of capital. The other major concern with the reverse
mortgage process is the question of, “What if the loan grows to exceed the
equity I have in my home?” The answer leads us right back to the federal
government and specifically the FHA, or Federal Housing Administration. Again,
in an attempt to promote the reverse mortgage system, the FHA will protect you
from lenders looking to collect on their loan by forcing the lender to request
reimbursement from the FHA directly if they decide not to sell the home to
cover their costs.

The best part about Reverse Mortgages