Reverse Equity Mortgage - How Much Money Do I Get
The great benefit of the reverse equity mortgage is, that you get cash money and you do not have to pay back anything before the loan will be closed. This happens, when you or the last home owner will move away or you will pass away and the home will be sold.
There are three factors, which determine, how much you can get. Your age, the value of your home and the interest rates. We can say that the older you are, the valuable your home is and the lower the interest rate, the more you can get.
1. How To Qualify?
The federal government has done the qualification very flexible. Maybe the reason is, that by a reverse equity mortgage a senior citizen can finance his own life without the help of the state. However, all who are American, age 62 or over and who own a home, where they live permanently will qualify.
2. Can My Spouse Be On The Title?
There can be maximum three owners on the title, but all must naturally fulfil the requirements. They can be spouses, relatives and non relatives, it does not matter. If all three are marked as owners, they must take care about the home, all taxes and insurances and to keep the property in a good shape. When the last owner will move permanently away or die, the property will be sold and all costs of the reverse equity mortgage will be paid away.
3. When Do I Have To Pay Back?
First, all owners, who are on the note,must to take care of the loan payment. The idea of the senior equity reverse mortgage is, that the lender will pay to home owners along the schedule the borrower has decided. So the borrower will never pay back anything on a monthly basis. He will pay back all expenses, interests and other costs, when the loan will be closed and the home sold.
4. Shall I Take Reverse Equity Mortgage With Fixed or Variable Interest Rate?
Actually you have to decide, in the same way as with a usual mortgage, whether the fixed or variable rate is better for you. The major differences are, that with the fixed rate the expenses are easy to forecast but with the variable rate, the interest rate will fluctuate along the market prices.
5. How Much Money Is Left?
This is a question, which interests your heirs. However, I cannot give you a straight answer, because many things will influence on that, for instance the interest rates. One thing is useful to remember. Because you will remain the owner of the home, you will benefit from the value increases during a long period of time. In most cases and years the value increases have been bigger than the interest rate.
by: Juhani Tontti