A reverse mortgage is a financial product that helps homeowners who are 62 years and older. Specifically, it gives the homeowner money for their property without making them move out. It is best for those who own their home, or have very little left on the mortgage to pay off. The money can be used for whatever they need it for, and there are no restrictions on its use. Reverse Mortgages in Chesapeake are guaranteed by the federal government, and don’t have to be paid back.
Getting a reverse mortgage is very similar to getting a regular mortgage, but instead of paying money to the lender, the lender pays out. In order to qualify, the borrower has to use the home for their primary residence. The lender takes into consideration the age of the borrower, the appraisal of the home and the interest rate in the program. Once the appraisal is in and the various criteria are satisfied, the lender will approve the loan and it is up to the borrower to take what’s on offer. The borrower also has to take a financial counseling course to demonstrate they understand what it is they are engaging in with a reverse mortgage.
When it comes to receiving the money, the borrower has different options available to them. It is possible to use the reverse mortgage as a line of credit, in monthly payments or to take the cash in one lump sum. The homeowner has to make the decision that makes the most sense for their situation. It may be that monthly payments are sufficient to take care of certain bills, or a large debt needs to be settled and a lump sum makes the most sense.
Although interest is charged on the money that is taken out, at no time does it have to be paid back. Property taxes and insurance still have to be paid by the homeowner, however. The only time the loan comes due is when the homeowner passes away, sells the home or fails to maintain taxes and insurance.
Reverse Mortgages in Chesapeake can be a source of much needed financial relief, but they do need to be thoroughly understood before taking one out. Click here to know more.
