With the introduction of the Home Equity Conversion Mortgages (HECM) or reverse mortgages, seniors have an opportunity to benefit from the equity in their homes. This type of a loan can either be released as a lump sum or as a series of payments. Borrowers can use the money to pay their medical bills, make home repairs and renovations, pay off debts or take the trip of a lifetime.
In order to qualify for a reverse mortgage, borrowers must:
- Be sixty two years or older
- Occupy the property as their principal residence
- Own the property outright or have a small mortgage balance
- Participate in a consumer information session that is given by a licensed HECM counselor
- Not be delinquent on any federal debt
Some of the major financial benefits you can derive from taking a reverse mortgage are:
- Closing costs may be covered in the mortgage
- No credit checks are required
- No income is required of the borrower
Reverse Mortgage Lenders New York do not requires borrowers to make payments for the loan as long as the home is their principal residence. Reverse Mortgage Lenders recover their principal and interest once the home is sold. Any excess profit realized from the sale goes to the customer or family heirs. In case of death of the senior, family are the ones to repay the loan.
How the Reverse Mortgage Program works:
Once a senior has been confirmed part of the reverse program, payments can be made as follows:
- Tenure- Equal monthly payment as long as the borrower continues to occupy the property as a principal residence
- Term -; Equal monthly payments for a fixed period of times selected by the borrower.
- Line of Credit- Unscheduled payments or in installments, in an amount of your own choosing, until the line of credit is exhausted.
- Modified Tenure- Combination of scheduled monthly payments and line of credit for as long as you remain in the principal residence.
- Modified Term- Combination of monthly payments and line of credit for a fixed period of time selected by the borrower.
A reverse mortgage is a good option if you are facing financial challenges after retirement. However, it is imperative you choose the right Reverse Mortgage Lenders New York to offer you this loan.
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