Reverse Mortgage Important Facts - Do You Know Them?
There are numerous pertinent and important facts to remember regarding a reverse mortgage
. First of all, this is a type of mortgage or loan that can be availed by senior citizens of the United States of America. The minimum age requirement in order to avail of this loan is sixty-two years. Any person who has reached this age before the effectivity of the contract of mortgage will qualify. Any individual on the other hand, who is under this preset age cannot avail of this mortgage as a general rule prescribed and mandated by the law. To date there are currently no exceptions recorded that would indicate debtors or borrowers that are under the required age who were able to procure this mortgage in the whole of America.
Secondly, the maximum limit that can be borrowed in this type of mortgage or loan is roughly around $625,500. This is the ceiling limit regardless of the total amount of the land, building or home that is the subject of the mortgage. The limit has been raised from the previous $200,000 before the year 2008 and up to $417,000 in the said year before being raised again to $625,000. The financial experts and specialists have carefully studied the raise by gathering enough data throughout the entire United States every year. The figures will typically adjust again within the next couple of years depending on the results of the studies with regard to this reverse mortgage.
Thirdly, the older the borrower or debtor is, then the more lenient the lender or creditor becomes. This is the followed rationale or general principle behind this reverse mortgage since it has been specifically made in order to address the concerns of the old citizens of the U.S. Some of the strict rules will be waived by taking into consideration the age of the borrower or debtor. Fourthly, counseling is required when availing of this kind of mortgage. Third party counselors usually do the counseling in order to adequately equip the debtor or borrower with all of the necessary pieces of information and knowledge regarding the mortgage that he or she will be getting himself or herself into.
Next, the interest rate that will come with the amount of money borrowed will constitute as a lien on the property, land, home or building that is the subject of the mortgage. There will be no payment of the interest every month; instead, the total amount of interest will just be added to the title of the property. Just in case the borrower or debtor fails to pay the creditor or lender, then the latter can exercise the rights of such lien in order to get paid.
Lastly, availing of this kind of mortgage requires that any subsisting or active mortgage be settled first. As such, a senior citizen who wishes to avail of this reverse mortgage must first pay his or her existing mortgages out of his or her personal money before being qualified to get this mortgage.
by: John Andrew
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