What You Need To Know About A Reverse Mortgage

Many senior citizens come to find after they have retired that they do not have enough income to support themselves. There are some options for seniors who are in need of money. Many senior citizens are able to find a solution to their money woes through a reverse mortgage. A reverse mortgage is a type of loan in which you borrow money based off of the equity that your home as accumulated over the years. More and more senior citizens have reverted to this option over recent years, and if you are interested in one yourself, there are a few things that you need to know. Learn more information about reverse mortgages.

A reverse mortgage loan is not meant for everyone, if you want to apply for one you will need to meet a few requirements. The first thing is you must meet the minimum age requirement. Usually the minimum age is between 60 and 65, but the age really depends on what financial institution you are getting a reverse mortgage from. If the reverse mortgage is for more than one person, the younger person must also meet the minimum age requirement. Another thing that you need in order to qualify is to own your home outright. If you do owe money on your home, the amount must be low enough to be paid off by the reverse mortgage. If you do meet the qualifications, you will want to understand the size of the loan and payments you will receive.

The size of the loan that you will be able to get is contingent on a couple of things. The area in which you live in will affect how large it can be, but usually it cannot exceed 50% of the value of your home. There is also a floor and a ceiling to the size of a reverse mortgage, usually it cannot be for less than $10,000 or more than $425,000.

The size of the payments that you will receive will also be affected by a few factors. The older you are, the higher your payments will be each month if you choose an annuity. This is not applicable to people that got their reverse mortgage in the form of a lump sump. The bank will also change the size of your payment based off of market interest rates and the location of the house you are borrowing on. Find out more ideas about reverse mortgage loans pros and cons.

Because of the uncertain nature of Social Security and Medicare, it is now more important than ever for seniors to be prepared for their retirement. Many seniors do not realize this until after their retirement. If you are in need of money, a reverse mortgage may be right for you.