วันพุธที่ 14 เมษายน พ.ศ. 2553

How Reverse Mortgages Can Help Fund Your Retirement

How Reverse Mortgages Can Help Fund Your Retirement

By: Gen Wright

Reverse mortgages can help to improve the financial situation of an old person. An individual taking out a reverse mortgage will be able to live off the existing capital of the property. Here is how the process usually works.

Lenders or banks take pains to ensure that those intend to take up a reverse mortgage understand how the loan works. Individuals must go through a counseling session before they are allowed to sign up for the loan.

The name of the loan, "reverse mortgage", reveals a lot about the nature of the borrowing. The homeowner owns a property that he has been paying monthly installments for years. But this was when the homeowner was still young and had the capacity to earn a steady monthly income. However, the situation has now changed. With old age setting in, the homeowner can longer keep up with the monthly installments. But the property is worth something after all these years.

To qualify for a reverse mortgage, the homeowner must meet the following requirements.

1) Must be over the age of 62.
2) The home must be fully paid up, or must contain a reasonable amount of equity.

It is interesting to note that credit score is not important here. Credit score is used to assess the risk of the loan because the lender is undertaking a certain amount of risk by lending money to the borrower. In a reverse mortgage, the equity already exists in the property, so there is no risk on the part of the lender. Hence, there is no need to consider credit score. For this reason, this type of loan is easy to get approved.

Of course, there is no free lunch in this world. The lender makes money by charging an interest on the loan. However, it's comforting to know that there is often a ceiling on how high the interest rate can go. This cap is put in place so that borrowers can have peace of mind, knowing that the interest rates won't become unmanageable.

The loan amount depends primarily on the appraised value of the home, and how much equity has been built up over the years. The higher the value, the higher the loan amount. Of course, how much to borrow is up to the homeowner.

The actual loan amount may be far lower than the allowed amount. For example, the homeowner may be a side income. But this income isn't enough for his lifestyle. So he takes up a reverse mortgage to make up the difference. Remember, interest is being charged on the loan. So it doesn't make sense for the homeowner to borrow more than what is necessary.

Very often, the financial situation of older people may change. Many old people remain active and continue to work. At an old age, money is probably just a side benefit. They probably just enjoy working. They may not earn as much as before, but they continue to receive a monthly income. A reverse mortgage loan can be used wisely to manage the cash flow situation and allow these individuals to enjoy live their retirement years happily.

Learn more about Types of Mortgages. The different Mortgage Types can help you solve your home financing problems.

Article Source:
http://www.articlebiz.com/article/585644-1-how-reverse-mortgages-can-help-fund-your-retirement/

6 ความคิดเห็น:

Sara กล่าวว่า...

Hi,

Today I causally visited your Blog: www.adjustable-rate-mortgage-lender.blogspot.com and was really impressed with some of your articles and pages. I must say that you have spent lot of time and effort to ensure your visitor to gain benefit through quality informative contents. But it is equally more important for you to promote your website so that you can increase your site PR and traffic. For that I can offer you my finance website which has good PR and you can place your links in my content. If you want we can also go for article exchange or guest post.

Thus visitors coming to my site will automatically get diverted to your site and it will help you to increase your site PR and traffic.

For any other information please get in touch with me through my mail: sarajames27@gmail.com. If you have anything else in your mind please feel free to share with me.

Looking for your positive reply.

Thanks,

Sara James

jackychain กล่าวว่า...

I appreciate the concern which is been rose. The things need to be sorted out because it is about the individual but it can be with everyone.
critical illness cover quote

johnythomas กล่าวว่า...

The above thought is smart and doesn’t require any further addition. It’s perfect thought from my side.

cheap life insurance quotes | life insurance uk

Fundscare กล่าวว่า...

The original advice you received, to send the CA a letter stating that the debt was settled in full and provide a copy of the original letter demonstrating this fact, is sound imho. You might also want to pull a copy of your credit report to make sure they aren't reporting a debt they shouldn't even be collecting.
Collection Agencies

liberty reversemortgage กล่าวว่า...


Reverse mortgage loan has the capability of providing the senior citizens of America with a financial security that they look for after their retirement.

Reverse Mortgage Loan

Albert Jhon กล่าวว่า...

I just needs to say that I found your website via Goolge and also I am glad I did so. Keep up the nice work Cheap life insurance in Houston

 
3 Columns Blogger Template by Amanda at BloggerBuster