In a word, a reverse mortgage is a loan. A homeowner who is 62 or older and has considerable home equity can borrow against the value of their home and receive funds as a lump sum, fixed monthly payment, or line of credit. Unlike a forward mortgage—the type used to buy a home—a reverse mortgage doesn’t require the homeowner to make any loan payments.
Instead, the entire loan balance, up to a limit, becomes due and payable when the borrower dies, moves out permanently, or sells the home. Federal regulations require lenders to structure the transaction so that the loan amount won't exceed the home’s value. Even if it does, through a drop in the home’s market value or if borrower lives longer than expected, the borrower or borrower’s estate won’t be held responsible for paying the lender the difference thanks to the program's mortgage insurance.
A reverse mortgage is a type of home loan for seniors ages 62 and older.
Reverse mortgage loans allow homeowners to convert their home equity into cash income with no monthly mortgage payments.
Reverse mortgages can be a great financial decision for some seniors but a poor financial decision for others.
Be sure to understand how reverse mortgages work and what they mean for you and your family before borrowing.
Why Should You
If you’re interested in applying for a bank statement loan to secure financing for a home, contact Equity Direct Financial today. We can help you with a bank statement loan that helps self-employed workers and independent contractors avoid having to submit tax returns for loans. Don’t let the lack of a tax return stop you from getting the loan you deserve. We at Equity Direct Financial will ask you to submit several months’ worth of bank statements to us, which we will review and verify before we submit to a home lender.
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Whether you’re looking to purchase a new home or refinance your existing home, Equity Direct Financial can provide all the help you need.