Making Sense of Reverse Mortgages
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Making Sense of Reverse Mortgages
A reverse mortgage is borrowing against the equity in your home to provide cash for today. You still own your home and are still responsible for property taxes, etc. Seniors use reverse mortgages to pay for any expenses they incur later in life. At the end of the loan you or your heirs must repay the loan plus whatever interest has been incurred.
Reverse Mortgage Loan Amounts
The loan amount varies depending on your age and your home's value. Other factors include interest rates and closing costs for your reverse mortgage.
A reverse mortgage is typically taken out on a home with no current mortgages, however some lenders will allow you to take out a reverse mortgage to pay off part of a current mortgage on the home.
Reverse Mortgage Limits
The amount you owe is based on the principal balance you owe plus interest and any finance charges. You can never owe more than what your home is worth in a reverse mortgage.
Paying back your Reverse Mortgage
The loan is required to be paid back when the last borrower has passed.
Changing Your Mind about a Reverse Mortgages
The borrower has 3 business days to cancel the loan if they change their mind.