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Business Real Estate Types of Reverse Mortgage Available
| Types of Reverse Mortgage Available |
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| Written by Igor Buces |
| Thursday, 24 July 2008 17:39 |
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Reverse mortgages help senior citizens over the age of 62 take advantage of the equity they have accumulated in their home to make up for the loss in income. They work as a kind of loan advance on the present mortgage. However, the owner of the home doesn't need to pay back any of the money for as long the owner stays in the home. The homeowner doesn't need to pay any money back and can not be kicked out of the home for lack of payments because there aren't any payments to make. The homeowner can elect to receive the money from the reverse mortgage in one of three ways: a one time payment, a credit line or as regular monthly payments. Owners can apply for three different types of reverse home mortgages: single purpose reverse mortgage, federally insured reverse mortgage and private reverse mortgage. Single Purpose Reverse Home Loan This type of reverse mortgages is offered by some Government organizations and non-profit agencies. It's the cheapest of the reverse mortgage available. However, there are more hurdles to go over to qualify for this loan. The owner must be in the lower income bracket and the home loan must be used for a specific pre-approved purpose (home improvements, repairs or to pay real estate taxes.) Federally Insured Reverse Home Mortgage The HUD (U.S. Department of Housing and Urban Development) insures this reverse mortgage. This kind of reverse mortgage is also known as a Home Equity Conversion Mortgage (HECM.) It is a loan slightly more expensive than the single purpose one. This type of reverse mortgage is by far the most common of the three. It accounts for over 90% of all reverse mortgages. It's very popular because it's very easy to apply to and qualify for. In addition, you can use the money from the loan far whatever reason you want. Private Reverse Mortgage This kind of reverse home loan is available through private companies that haven't been HUD certified. They usually have the same requirements than a federally insured one. The biggest drawback is its cost. Since it doesn't need to comply with federal regulations, companies can get away with charging to much money to unsuspected senior citizens. About the Author: To find additional articles about how a senior reverse mortgage works, go to our website. In it you'll find expert counsel on everything having to do with a reverse mortgage Kindly provided by MoneyHunter.org You are welcome to use this article on your own website, if you include the link just before this text. |
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