Reverse mortgages are loans that are available to homeowners who are 62 years or older. It’s used so that they can convert part of the equity in their home to cash.
Its intention is to provide a means for retirees with limited income to use some of the accumulated wealth in their homes to cover basic monthly living expenses and to pay for ongoing health care. However, there is no restriction to how the proceeds from a reverse mortgage can be used.
The reason the loan is called a reverse mortgage is due to the fact that it works in a completely opposite manner to that of a traditional mortgage. Instead of making monthly payments to a lender, the lender makes payments to the borrower. The borrower is not required to pay back the loan until the home is sold or vacated. As long as the borrower lives in the home, he or she is not required to make any monthly payments towards the loan balance. However, the borrower must remain current on all property taxes, homeowners insurance and (if applicable) homeowners association dues.
If you’d like to know more about reverse mortgages and whether or not they’re the right decision for you, contact our offices in Joplin, MO. We are experienced dealers in the mortgage industry and are certain we have the right plan for your needs. Contact us today and let us know how we can help you.