When you are 62 years old and have accumulated enough equity in your home to qualify for a Reverse Mortgage, you can apply for this loan. Although it is a tax-free loan, the borrower must undergo counseling before applying for one. In addition, Reverse Mortgages are only available to homeowners who are at least 62 years old. To learn more about Reverse Mortgages, read this article.
Reverse mortgages are non-recourse loans
Unlike traditional loans, reverse mortgages are non-recourse. This means that the lender cannot collect more money than the current value of the home at the time the loan is due. As a result, the lender will take a $20,000 loss if the borrower passes away or sells the property. In addition, this type of loan only applies to the sale of the home, not the gift of the home. Hence, in the event of a borrower’s death, the heirs will be responsible for repaying the remaining loan balance.
They are tax-free
Reverse mortgages are an excellent way to free up some of the money in a retirement account for other expenses. Many clients use the money from the Reverse Mortgage to pay off existing debts, allowing them to stretch their savings further. While the loan may come with some restrictions, it is often tax-free. Reverse mortgages are a great option for retired seniors, as they offer the added flexibility of not paying off a monthly mortgage.
They are available only to homeowners at least 62 years old
Reverse Mortgages are loans for older homeowners that let them use their home’s equity to purchase cash. The loan comes due when the borrower passes away, no longer resides in the home, or no longer makes payments on the mortgage. The reverse mortgage can only be obtained through an authorized FHA loan lender. It is only available to homeowners at least 62 years of age. The only other qualification is that the borrower must still be a homeowner.
They require counseling
Reverse mortgage counseling is required before you can obtain a reverse mortgage. The counselor can provide you with a number of tips to make the most informed decision about your loan. Reverse mortgage counseling should cover the advantages and disadvantages of reverse mortgage loans and what you need to do to make the best decision for your unique financial situation. In addition to discussing the benefits of reverse mortgages, the counselor will also cover the responsibility of borrowers to continue paying property taxes and maintaining their property. You must also discuss repayment options and any impact they may have on public benefits.