Thursday, August 28, 2008
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A reverse mortgage could make all the difference to your retirement years!
- A reverse mortgage is only available to homeowners 62 years or older.
- There are no income qualifications.
- The borrowers retain title to the property and can continue to live in and own the home for as long as they choose.
- There are no monthly mortgage payments during the life of the loan.
- Proceeds are tax-free and can be used for any purpose; they may be paid out as a lump sum, in monthly payments, as a line of credit, or a combination.
- The loan amount depends on the borrower's age, appraised value of the home, current interest rates and the type of reverse mortgage selected. It's good to know that lending limits have just gone up at the beginning of 2006 and interest rates have stayed surprisingly low.
- A reverse mortgage isn't repaid until the borrower moves out of the home permanently.
- The repayment amount cannot exceed the value of the home, regardless of the loan balance.
- Once the loan is repaid, any remaining equity is distributed to the borrower or the borrower's heirs/estate. Note: This is a great way to reduce the estate tax burden on your heirs.
- The home doesn't have to be owned free and clear to qualify for a reverse mortgage.
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