With a regular mortgage, the lender makes a lump sum payment to the borrower, who in turn repays it through monthly payments to the lender. With a reverse mortgage, the lender makes a monthly payment to the homeowner who later repays in a lump sum. The reverse mortgage can be particularly valuable for a senior homeowner who does not want to sell, but whose retirement income is not quite enough for comfortable living. The homeowner receives a monthly check, has full use of the property, and is not required to repay until he sells or dies. If he sells his home, money from the sale is taken to repay the loan. If he dies first, his property is sold through the state and the loan repaid.
More About A Reverse Mortgage
A reverse mortgage is a type of home loan that allows homeowners to borrow against the equity in their home. Unlike a traditional mortgage, a reverse mortgage does not require monthly payments and the loan does not need to be repaid until the borrower dies, sells the home, or permanently moves out. This makes reverse mortgages an attractive option for seniors who want to stay in their homes but have limited income. reverse mortgages can also be used to purchase a new home. The loan is paid off when the borrower dies, sells the home, or permanently moves out. reverse mortgages are typically only available to borrowers who are at least 62 years old. Borrowers must also have a low debt-to-income ratio and sufficient equity in their home. reverse mortgages come with some risks, including the possibility that the borrower will owe more than the value of their home when the loan becomes due. Borrowers should therefore carefully consider their needs and objectives before taking out a reverse mortgage.
Reverse Mortgage To Construction Loan