Tell me all about reverse mortgage and whoever offers it?
Answer:
reverse mortgage or reverse equity mortgage is a home loan that does not require to be paid back as long as a consumer occupies the property. It provides a way of converting the home equity into cash, and does not require monthly payments as in other mortgages. Reverse mortgages are meant for senior consumers aged 62 or above.
A reverse mortgage allows a borrower to receive cash in a number of ways.
The cash is provided in one single payment.
The loan is offered as regular monthly cash advances.
The reverse mortgage is also paid as a credit-line account which gives the borrower an opportunity to withdraw a required amount of cash whenever required.
The mortgage loan is also available as a combination of monthly cash advances as well as "credit-line account".
Features of reverse mortgages:
A borrower does not require an income to qualify for reverse mortgage; neither is his credit history verified before approving the loan. The loan amount depends on his age as well as the property value, interest rates and closing costs of home loans in the neighborhood of the borrower.
There is no such repayment scheme required in such mortgages. There is no need of any repayment as long as the borrower or any co-owner occupies the property.
With a reverse mortgage, a borrower remains the owner of the property and is responsible for paying property taxes and homeowner insurance, and also for conducting home repairs.
Before availing a reverse mortgage, a borrower has to first pay off his previous debts or he may also repay them with the cash obtained from the reverse mortgage. But there are lenders including the state or local government agencies who may allow him to repay the previous mortgage after he pays off the reverse mortgage when required.
The amount received as reverse mortgage loan is not taken as income and hence the Internal Revenue Service does not charge any taxes on it.
A reverse mortgage is just the opposite of a forward mortgage which requires the payment of the principal loan amount along with interest on a monthly basis. This helps a borrower in retaining his home equity and hence increasing the home value. But with reverse mortgages, there are no such monthly payments and so the debts go on increasing. The home equity therefore reduces to an extremely low value unless the property value keeps increasing. Therefore reverse mortgages are often known as "rising debt and falling equity".
a good deal for ppl who are retired or on a fixed income that need some extra money to live on until they die..otherwise not a great idea.
Get the Facts Before Cashing In On Your Home’s Equity.
To qualify for most reverse mortgages, you must be at least 62 and live in your home. The proceeds of a reverse mortgage (without other features, like an annuity) are generally tax-free, and many reverse mortgages have no income restrictions.
Three Types of Reverse Mortgages, see link below.
http://www.ftc.gov/bcp/conline/pubs/home.
Many lenders offer reverse mortgage, although I do not personally know which ones. First of all, you have to be at least 62 years old and own your own home. Your existing home mortgage (if the home is not fully paid for) will be paid off from the new "reverse mortgage" loan, the rest of the "loan" you can draw money down at will or on a schedule or anything else the lender allows. You do not make any monthly payments. Each month the outstanding balance of the loan goes up to account for that month's interest due that you are not paying. When you sell the property or it passes to your heirs after your death, the lender gets paid the entire balance due, including the unpaid interest, and whatever is left over goes to you or your heirs.
A "Reverse Mortgage" is offered to people 60 and over, who own or almost own their homes.A percentage ?? of the equity becomes the credit - and that is how much they would get.When either the house is sold or the owner dies, the Reverse Mtg get their money first. It is NOT usually offered by Housing,Finance Companies!Go on the web - search - as I don't know where you are,so the companies may not service your area. These companies advertise on a regular basis on TV! Watch for the ones that tell if you have structured payment from an annuity, they can give you all your money now! Do not go to "housing financial companies" !SEARCH THE WEB WHERE YOU LIVE. Good luck. Think carefully,read ALL the fine print, before you leap!
You can read a detailed article on Reverse Mortgage on
http://interesting-readings.blogspot.com.
A special type of loan available to equity-rich, older owners. Repayment is not necessary until the borrower sells the property or moves into a retirement community.
As you take Home loan mortgaging u r house to lender ,reverse way u think ,u have a house without any loan on it ,means property document is with u.now u can mortgage it not for loan but for receiving money as EMI ,this is reverse mortgage. .This u can do it as a pension at your old age or u dont have any sort of income or u need a little more money to meet u r monthly expenses,As for home loan there is a specified tenure u choose to repay as EMI but in reverse mortgage there is no fixed tenure.This lasts for till the survivor of any one ,means husband or wife.when there is none alive(husband and wife) the said property will be in possession of the lender.Now u have option to repay the loan u have taken to get back the possession,or at the time of making reverse mortgaging agreement document whomever u have specified ,such as your child/children,or X,Y,Z name.HE/SHE/THEY.can repay the loan amount and get back Repossession.
So far as i know only one co.DIWAN HOUSING and finance IS OFFERING THIS REVERS MORTGAGING .But the offer is abysmally low For example, if the property valuation is RS 25 lacs u Will get only RS 5000/ as EMI.
This ia beginning,u will find there will be A ot of in this business,Then who will win? The co.who gives better Emi with the age of the Owner.AS in Life insurence/Medial insurence u have to pay higher premium as according to higher age/In reverse mortgage this should allso be reverse.Higher the age (joint) Higher the EMI.
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