A reverse mortgage is essentially a reverse mortgage loan, generally secured with a home, which allows the homeowner to access the equity in the home for a certain amount of time. The reverse mortgages are usually advertised to senior citizens and are typically not required monthly mortgage payments after the initial purchase is made. The amount you receive may vary depending on your age and health status, but there are some basic guidelines that you should be aware of when applying for a reverse mortgage.
When you are working with a bank to apply for the loan, they will first ask about your current financial status and any existing debts. This information is used to help determine the amount that can be repaid as a down payment on the new loan. If you have any equity in your home, it is typically used to secure the loan. Some lenders will allow you to borrow up to 100% of the appraised value of your home, while others will not.
Once the bank has approved you for the loan, they will provide you with the paperwork. The lender will then send you a set amount of money to use for the payment of the loan over the course of a specified period of time. As long as you maintain a reasonable standard of living, and pay your monthly mortgage on time, you will have the right to take a reverse loan out for a predetermined number of years. During this time, you are still responsible for all of your monthly payments, even if you no longer live in your home. The loan is subject to the laws of the state where you live, and if you neglect to make your payments, the lender can repossess the home. If you are planning on selling your home, this may not be a good idea, since you may not be able to get another loan. You will however, be able to find a buyer who will be willing to work with you to find the best deal for your needs.