Reverse Mortgage

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Reverse Mortgage - Smart Thinking And Reverse Mortgage

Reverse mortgage is a smart way of staying independent throughout your life, especially in old age. If you are a senior citizen and are unable to support yourself financially, then you can make your home earn for you. Yes, that is the way reverse mortgage works. Read on to know more.

Different From Other Mortgages

It is time that the equity invested in your house brings in good returns. Reverse mortgage works on the principle that many people living in huge homes have no source of income, so why not make their homes earn? You are issued a reverse mortgage on the basis of your house's worth, taking the house as collateral. And here the similarities with other mortgages end. Herein, you can choose to take the loan amount the way you want. You can get the whole amount in a lump sum or you can receive it in smaller amounts and at times you need. Or you can choose the most common method that is agree for a regular monthly payment. This way, without any hiatus, you will continue getting money from the lender. Then, this mortgage requires you to live on in the same house. Unlike other mortgages you remain the sole owner of your house. You can remodel it, sell it or will it to your children. Another difference is that with every payment made your loan amount only increases. However if you decide to sell your house or in the event of your death, the monthly payments will stop and the whole amount received until then along with interest has to be paid back. This can be done by, of course, selling the home. While in other mortgages, loan term and the amount is finalized before the loan is issued, in reverse mortgage the principle amount and the date of maturing cannot be determined until the mortgaged is paid back. The interest rates are adjustable rates, which are same throughout US, provided your mortgage is backed by federal programs. Since the loan is solely based on your house's worth so you can never borrow more than its value. But the plus point is that you won't have to sell your other assets to repay the reverse mortgage.

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