Reverse Mortgage Basics
There is popular belief that a reverse mortgage is an excellent way to obtain cash against one's home equity if one has a fully-paid off home. This belief is true. A reverse mortgage is also the recommended way to pay off an existing mortgage if you are cash-strapped and have exhausted all the other resources. It not only has the ability to elimnate your entire mortgage bill but can also suppliment social security or pension income by providing ready cash for such escapades as home improvements, vacations, healthcare, taxes, and gifts, not to mention saving you hundreds of dollars a month in mortgage payments.
There has been inquiry as to whether it is possible to get a reverse mortgage but still continue to pay on the existing mortgage. The answer is a simple no. Reverse mortgage lenders conduct a thorough search to ensure that the applicant is not trying to do this. This is because this would make the reverse mortgage a second mortgage whereas the laws and regulations demand that a reverse mortgage be the first and only mortgage. This is because a reverse mortgage is still a loan which does not come due until death of the borrower. The loan can also become due if the borrower decided to move or abandon the property permanently. So one should guard themselves against the notion that a reverse mortgage is free cash. Another reminder is that reverse mortgages are only available to individuals 62 years of age and older.
Most reverse mortgage lenders offer excellent information regarding the basics of reverse mortgage but it is always essential to compliment that with FHA-approved counseling which is free. This is done so that the applicant is furnished with all the proper information to make an informed decision. It is also recommended that you get a reputable reverse mortgage lender and these lenders can easily be located by cicking the banner below.
To safeguard the rights and priviledges of the elderly, the reverse mortgage industry is highly regulated by the FHA and HUD and this is to prevent abuses. Reverse mortgage lenders, therefore, compete on service, knowledge, and experience. A reputable lender is one that is able to help you feel comfortable with the decisions you are making.
