Lately, it seems like there’s been a lot of talk in television ads and elsewhere about reverse mortgages. If you’ve never heard of a reverse mortgage before, the concept might not seem sensible just by thinking about it. While reverse mortgages may appear confusing, they can also be very beneficial for borrowers under the right circumstances.
Who Qualifies for a Reverse Mortgage?
Reverse mortgages are designed for people aged 62 or older who are on a pension and have owned their homes for a long time. Provided you satisfy the age requirement, the house where you live must be paid off and be in good condition. This includes being up to date with insurance and property taxes. Once you’ve confirmed that your home meets all the prerequisites for a reverse mortgage, you can consider consulting a local firm of mortgage brokers Colorado to discuss your options.
How Does a Reverse Mortgage Work?
A reverse mortgage gets its name from the fact that, unlike in a standard mortgage where you pay a bank or other creditor, your lender actually pays you each month. This is one way for retired seniors to supplement their fixed incomes, simply by doing what they’ve always done, maintaining the home they’ve lived in for years. Reverse mortgages are similar to home equity loans, except you don’t have to repay them for as long as you remain in your home. If you take good care of your house and, one day, you find yourself in a position to sell it, you could pay off the loan with money from the sale and still have cash left over for yourself.
The precise terms of a reverse mortgage vary according to the state of your home and the individual lender. With complete and correct information on reverse mortgages, you can determine the best mortgage company to suit your needs.