Reverse Mortgage Headlines
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Owners look over reverse mortgagesMyrtle Beach Sun NewsYou can still apply for a reverse mortgage if your home is worth more than the limit, but your payments will be calculated using the government's limit as ...and more » |
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Who, What, WhereBoston GlobeKing has joined the bank as a reverse mortgage specialist in its Mortgage Banking Department and will work out of Eastern's Reading and Lynn offices, ...and more » |
The reverse mortgage is a type of loan for homeowners who are over 62 years of age. The reverse mortgage makes it possible for older homeowners to access the equity in a property as a line of credit or monthly payments. These loans are typically repaid by sale of the property once the home has been vacated by the owners for a period exceeding 12 months.
This allows older homeowners to receive tax-free income without having to sell their homes. But there are some ongoing costs associated with the reverse mortgage. Interest is typically a variable rate tied to an index such as the one year T-Bill rate plus points which usually run between 1 and 3 percent. Additionally there may be a monthly service charge. Interest and service charges collected result in an increase in the loan amount.
Even if one has a home mortgage they may still be eligible for a Reverse mortgage. Often homeowners opt to pay off any existing mortgage but since a reverse is not a loan in the traditional sense the funds may not be used to incur additional debt but may be used to pay off same.
The funds received from a reverse Mortgage has no effect as to ones eligibility to receive Social Security or Medicare benefits. This is not true with regard to Medicare as any funds not spent in the month received will likely be counted as an asset and may affect ones ability to receive payments.
Before receiving a reverse mortgage homeowners are required to receive counseling to make sure they understand what a reverse mortgage is and how it works.
