Reverse Mortgage-Another powerful financial instrument.

Author by Anonymous

May 13, 2004 -- We are a mortgage information dissemination company. In our day to day business we see a lot of misunderstandings related to reverse mortgages. We hope that this article about reverse mortgages along with the associated resources will help you in taking better use of this powerful financial instrument of reverse mortgages.



A reverse mortgage is a special type of mortgage that enables the seniors to convert the equity in their homes into cash or monthly income. Reverse mortgages are offered by banks, mortgage companies, and other financial institutions. You may be eligible for a reverse mortgage if you are atleast 62 years old and you own your own home. The costs for obtaining a reverse mortgage are same as the costs for obtaining a traditional mortgage. The interest rates for reverse mortgage are calculated using a formula set by the federal government. People can receive money from reverse mortgage through fixed monthly payments, line of credit, lump sum or some combination. You can use the money received from a reverse mortgage for any purpose. Generally, reverse mortgages are not paid back, until the borrower dies, sells the house or permanently moves out.



Benefits

• Instead of making monthly payments to a lender, as with a regular first mortgage or home equity loan, a lender makes payments to you.

• They are "non recourse" which means that no matter how high the loan balance grows, the borrower or their heirs never owe more than the home's market value.

• The home does not have to be sold to pay off the loan. You (or your heirs) can pay off the reverse mortgage and keep the home.

• Moreover, if the home is sold and the sales proceeds exceed the amount owed on the reverse mortgage, the excess money goes to you or your estate.



Available Cash

The amount of cash available from a reverse mortgage depends upon your age at the time you apply for the loan, value and location of your home, current interest rates and the type of reverse mortgage you choose.



Safety

Reverse mortgages are very safe since you do not give home ownership and do not owe more than the value of property at the time the loan is repaid.



If you have further questions about reverse mortgages please feel free to fill out the contact form at http://www.mortgagefit.com/contactus/ on our website to contact us with your question. And our knowledgeable mortgage staff will answer your first 5 questions for free.



External resources:

1. Know more about reverse mortgages -> http://www.mortgagefit.com/reverse.html

2. Know more about home equity -> http://www.mortgagefit.com/equity.html

3. Eligibility for reverse mortgage -> http://www.mortgagefit.com/reverse-eligible.html

4. Costs of reverse mortgage -> http://www.mortgagefit.com/reverse-costs.html

5. First mortgage -> http://www.mortgagefit.com/first-mortgage.html