You might that retirees and elderly are no longer qualified to engage in financial assistance.
Well, there is no need to worry because reverse mortgages are the answers to their problems.
These types of mortgages give the opportunity to the borrower to convert a portion of the loan to cash.
He can either get these funds through a one-time payment or series of payments.
But the owner must present his house as collateral to the lender.
The loan will only be stopped in the event where the borrower dies, moves in to a new house or fails to maintain the property.
If you have plans of using the money to buy a new house, then you are free to do this.
It is best that you use the one-time payment since you will really have to use huge sum of money when buying a house.
The total amount to be paid through lump sum payment is equal to the amount of the down payment for the house that you wish to buy.
However, it would be best if you pay off the whole amount of your dream house and just utilize the funds from the reverse mortgage to settle your monthly expenses.
So how are you going to be eligible for this loan? OF course since this is for retirees and elderly, he must be 62 years of age or more.
Aside from that, he must own a house.
If the owner still has a loan balance on his current house, it should be settled first before the closing procedure is done.
His application will be disapproved once his loan balance is still high and will not be able to pay this before the closing.
He must also be currently staying in the house.
Unfortunately, there are properties which are not eligible for reverse mortgage.
Keep in mind that the house must be a single family home.
If the condo unit is approved by the HUD, then he can be approved for this mortgage.
Factors which greatly affect the amount of mortgage are the age of the applicant, interest rates and the appraised value of the house.
You have the prerogative on what type of payment mode you want to follow.
You can have it by tenure where you will get monthly payments if one of the borrowers still stays in the house.
You can also have it in terms.
The payments are made at specified months.
Apart from the two, you can also use the line of credit where you do not have a pre-determined time.
You can get the payments with any amount you want anytime.
Another option would be the modified tenure where it is a mix of line of credit and monthly payments.
The last one is the modified term.
This uses lien of credit mode and fixed periods.
Retirees and elderly will definitely have the best time of their lives with this type of financial aid.
After all their hard for a very long time, they deserve to be rewarded with this type of mortgage.