Understanding 5 Important Features Of Reverse Mortgage
You must have heard about reverse mortgage. If you are young and working, you may not have got the need to know about them. In case if you need money for any personal or social cause you can apply for a mortgage loan. Your home will act as a strong security to the money lender or bank. So things are easy for you at current date. What will you do when you get old and check out of from your job? If you are a businessman then some conditions will be an exception. However what will you do after retirement during a financial emergency during old age? If you have a home then you would be in a dilemma while taking a home mortgage loan. In case if you are not able to pay installments in time then your home may be forfeited by the bank. In such a condition you will loose a place to live in. Reverse mortgage has been devised for those old people, who cannot repay back the lend money due to absence of a job. Their home acts a security same as seen in normal mortgage. But in reverse type of loan they dont have to pay back money. After their death the money is recovered by the bank by selling their home. This strategy is really helpful to old people needing money. They dont have any earning still they require a home to live. Reverse security loans act as a shield for them at an advanced age. Let us look at some of their important features:-
1)Reverse mortgage is not taxable to home owners. The borrower person retains his ownership over the home even after taking the loan and submitting home as a security. The reverse loan exists in force till death of the final home owner. The home owner also has the debt option of paying the mortgage loan by selling the house. But this rule is not compulsory in a reverse type loan.
2)No monthly installments are required to be paid in such kind of loans as seen in a traditional home loan or second mortgage loan.
4)The borrower should clear of his annual home insurance and property tax. However they can also be cleared at the time of repayment of reverse mortgage.
5)Mortgaged loans of reverse nature can be taken for meeting personal expenses, paying off debts concerning credit cards and mortgages, doing home repairs & renovation, paying healthcare bills and meeting expenses on travels.