Senior homeowners are rightfully concerned with how does a reverse loan work and most importantly are concerned with loosing the home when securing a reverse mortgage – the good news is that when you receive a reverse mortgage you are going to keep ownership of your home and not the bank/lender.“Seniors continue to own their properties and not the banks – the HECM reverse mortgage program is one designed specifically for seniors who want to tap into the homes equity while living in the home for retirement.” Here at RMLD we compare different reverse mortgage lenders so that you can secure the lowest and best reverse mortgage quote online – the best tip to save money is to allow us to compare different lenders on your behalf.
The reverse mortgage loan works in the same sense as a traditional mortgage when it comes to ownership of the underlying asset ( the property), and this means that the borrower ( you or your parents) own the home. Even though you own the home you have an obligation just like a regular mortgage, which is the reverse mortgage loan.
No, you keep the home and the bank will make money off the interest which they are charging onto your loan. Some people get confused because they tell us ” well we have no payments with a reverse mortgage, so how does the bank make money.” Banks make their money on reverse mortgage loans primarily through the interest they charge onto your loan, and the loan increases in size as time goes by.
Reverse Mortgages only comes due when either you move out for more than 12 months or if you pass away. If you pass away and there is a spouse on the reverse mortgage then she can live in the home and keep receive payments/income. If she is not on the mortgage then the loan will come due as the borrower has passed away. This is crucial when considering a reverse mortgage, who should go on the mortgage because it affects the money you will receive, based on age.
§ must be 62 to qualify, no income or credit scores are required
§ you keep ownership of the property, not the bank
§ you select how you want to receive your income
§ the funds are not taxed
§ you can sell, move, or leave your property to your heirs if desired
§ you are responsible for the property taxes and insurance