Are you considering getting into a reverse mortgage program? Primary Residential Mortgage is a good source of information. If you’re thinking of venturing into this type of scheme, you should know the basics to help you make an informed decision. This type of loan has advantages and disadvantages that will make you think twice.
Designed for Seniors
This is a home equity loan for seniors at 62 years old or older. It enables them to stabilize their finances, hopefully, throughout their retirement. The amount a person can get depends on the value of their house, their age, the remaining balance of their mortgage and other similar loans. The older you are, the more money you can take using the loan. Lenders calculate the amount of the debt depending on the age of the youngest spouse (husband or wife) who still lives in the house.
Different Loan Payments
Borrowers have the option when it comes to payouts, some of which include:
- Line of credit – instead of taking money outright, you can get it when you need it through this option. One of the pros of using this alternative is that you only pay interest on the amount you took. The credit may also grow over the years.
- Lump sum – you also have the option to take the money all at once. This alternative turns the loan into a fixed interest one.
- Periodic payments – you have the choice to receive payments on a monthly basis among other options. You can set it for the remainder of your life or a specified period.
Before you even get consideration for a reverse mortgage, you must meet some basic requirements such as:
- The house is your main house, it shouldn’t be rental property.
- You always pay government on time and are not delinquent.
- You’ll need adequate equity in the house you live in.
These are some of the things you need to know before getting a reverse mortgage. This information allows you to make an informed decision before applying for one.