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How the Reverse Mortgage Can Pay Your Future Care at Home

By Juhani Tontti

The system is simple. When a senior has paid the mortgage payments for years and thus saved money, the reverse mortgage loan uses this equity and pays it back to the senior with the periodic payments, the senior has decided. The home equity is the only guarantee and an obligatory mortgage insurance takes care about the cases, when the home selling price cannot cover the whole amount of debt capital and expenses.

1. You Can Continue Living In Your Old Home.

After you have taken the reverse mortgage you are still the owner of the property and can continue living in your old house. What the reverse loan does is, that it will release equity and turn it into cash money every month. With that money you can pay the care. The good thing is, that the lender does not ask the credit or the income information, so the only requirement is, that you are at least 62 and own the home, where there is equity left.

2. When The Reverse Mortgage Will Be Paid Away?

As said earlier, the reverse loans are special products for special target groups, for the seniors. The loan will be paid away, when a senior, or the last borrower, will move away, die or sell the home. Then the home will be sold and this selling price will be used to pay away all expenses, interests and the loan capital. The remaining part belongs to the heirs or to the owner.

3. The Reverse Loan Is Safe.

When a senior will take the reverse loan, he has to take an obligatory mortgage insurance too. The idea of this insurance is, that it guarantees in all circumstances, that the borrower cannot lose other assets than the home and that the lender will get his money in all cases. When the loan will be closed and if the selling price cannot cover all expenses, the missing sum will be taken from the insurance.

4. The Payment Schedule.

Funny thing is, that a senior can decide the payment schedule. The alternatives are the lump sum, regular periodic payments, a credit line or the combination of all or some of these. The need of a senior will dictate, how he wants that the money will be paid.

5. How Much A Senior Can Get?

The rules vary from state to state. Generally speaking we can say, that the older the borrower is, the higher is the appraised value of the home and the lower is the interest rate, the more he or she can get. However, the absolute maximum is $ 625.000.

The idea of this article was to present you an alternative for the care at home and how to finance that. The reverse mortgage loan offers one option and to get more details, you could visit a federal counselor. The counselor can guide you also concerning other alternatives.

Juhani Tontti, B.Sc., Marketing. When a senior ponders the reverse mortgage loan, he can take into account, that the reverse loan can pay the care at home.

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