Reverse Mortgage – Things You Should Know

Reverse mortgages are different from other mortgage loans as this does not have to be repaid as long as the house owner lives in the house or move out permanently from the house. In such situation, the owner gets over 6 months to repay the balance of the reverse mortgage or can dispose the home to pay off the balance.

What is a Reverse Mortgage?

A reverse mortgage is a loan that can be availed by homeowners who are 62 years or more in which a part of their equity in their home can be converted into cash. Reverse mortgage is named so because it functions in a reverse way from the traditional mortgage as here the lender makes payments to the borrower.

Reverse mortgages for seniors will help the retired elders with limited income to use the equity in their homes to cover basic monthly living expenses and health care. The best part is that the house owners can use the reverse mortgage proceeds for whatever purpose they wish.

Eligibility for a Reverse Mortgage

Home loans for pensioners are available for those who are over 62 years old and possess a house that is owned free sans liens. If there is any mortgage balance, it can be paid off with the reverse mortgage proceeds. Reverse mortgage does not involve income or credit score requirements.

Estate Inheritance

Reverse mortgages remain in force till the owner lives in the house . In the event of the demise of the house owner or when the home ceases to be the primary residence for more than 12 months, the reverse mortgage can be repaid or the home can be sold out.

If the equity is higher than the loan due, the remaining equity goes to the estate whereas if the sales proceeds of the home is insufficient to pay off the reverse mortgage, the lender can request reimbursement from the FHA. No assets of the house including cars and other fixed assets or investments can be taken from the estate to pay off the reverse mortgage.

Loan Limits

To know more about eligibility you can contact the reverse mortgage services, which offer the best deals. The availability depends on the age, value of the home, current interest and the lending limits of the government.

When a reverse mortgage is in place, the house owners should pay property taxes and insurance promptly, failure of which can lead to foreclosure proceedings being initiated against the owner. Contact reverse mortgage Australia to know everything about reverse mortgage and the several ways to receive the proceeds.