| As the cost of living rises in 2010, a larger number of | | | | There are certain requirements a homeowner must |
| older homeowners are looking for a financial solution | | | | meet to fulfill the terms of the loan. All homeowners |
| that allows them to remain in their home and still have | | | | listed on the title of the home must be at least 62 |
| available money at their disposal. Often, an older | | | | years old. The home being financed must also be the |
| homeowner's basic living expenses will exceed the | | | | homeowner's primary residence, which means he or |
| income he or she receives after retirement, such as | | | | she resides there at least six months out of the year. |
| social security benefits. The cost of healthcare, often a | | | | Due to the absence of monthly payments, there are |
| necessity for older Americans, is also rising and is not | | | | no income or credit requirements for this type of loan, |
| always completely covered by health insurance or | | | | so in many cases, it is quite easy to qualify for this |
| government aid. A reverse mortgage could be the | | | | type of financing. |
| answer to this financial quandary. | | | | An appraisal will need to be done on the home to |
| Reverse Mortgages for Seniors: Basic Information | | | | ascertain the home's value. This will tell the |
| This type of financing is specifically designed for older | | | | homeowner how much equity is in his or her home so |
| homeowners who are financing a residential property. | | | | that the lender can determine how much money he or |
| This loan is unique, compared to other conventional | | | | she can receive from the loan. The homeowner must |
| home loans, because it does not require the | | | | also attend reverse mortgage counseling before he or |
| homeowner to make any monthly mortgage | | | | she can take out a reverse mortgage. This counseling |
| payments. As long as the homeowner pays property | | | | covers the loan and all of its requirements so that |
| taxes, stays current on homeowner's insurance and | | | | homeowners are better prepared before deciding on |
| maintains any necessary home repairs or | | | | this type of financing. In many cases, free counseling is |
| maintenance, he or she will not have to make any | | | | available to borrowers. |
| payments on the loan for as long as he or she | | | | Benefits of this Type of Financing |
| remains living in the home. | | | | This type of loan is insured by the Federal Housing |
| If a homeowner has sufficient equity in his or her | | | | Administration, which in turn guarantees that older |
| home, that equity can be converted into cash with this | | | | homeowners who take out these loans and stay |
| type of loan. The money received from the loan is | | | | current on taxes, insurance and repairs will never owe |
| tax-free and can be used any way the homeowner | | | | more than the value of their homes once their loans |
| sees fit. The money can be used to pay off other | | | | are due to be repaid. This type of financing allows a |
| existing debt, healthcare costs or to simply improve | | | | homeowner to stay in his or her home without |
| one's current lifestyle. The amount of money a | | | | worrying about paying monthly mortgage payments. |
| homeowner can receive depends on his or her age, | | | | This will leave him or her with more money for other |
| the value of the home, and current interest rates. | | | | expenses and will help them maintain or improve their |
| Homeowners can choose from several disbursement | | | | standard of living. |
| options, including a lump sum, a line of credit, monthly | | | | Senior homeowners have many expenses they are |
| payments or a customized option that is designed to | | | | responsible for and the income they receive after |
| meet their financial needs. | | | | retirement may just not be enough. A reverse |
| Requirements of this Loan | | | | mortgage could be the solution to their financial needs. |