Reverse mortgages are loans given to senior Americans against the collateral of their home. A reverse mortgage allows the homeowner to convert the equity in his home into cash. Compared to other kinds of loans, reverse mortgages are beneficial in many ways. When applying for other kinds of loans, the lender checks your income to confirm your ability to pay back each month. With a reverse mortgage, you don't have to make monthly repayments. No minimum income is required to qualify for a reverse mortgage. A person without any income can also apply for a reverse mortgage, provided he has his own house and is above 62 years of age. You can opt for the reverse mortgage to be paid to you as a regular monthly cash advance. In this case, the elderly person can enjoy the benefit of a steady income until the time of his death or when he sells the house. Medical bills, home maintenance, and other additional bills can be taken care of with the money. You can also take the option to have the money all at once as a single lump sum, or go for a credit line account which lets you decide when and what amount of cash is to be paid to you. The income received through a reverse mortgage is tax-free, and the ownership of the house remains with the borrower as long as he stays there. Lenders are eligible only for the sale price of the house, and cannot make a claim on the homeowner's other assets. Other benefits of reverse mortgages are that one can pay off the amount at any time, and can choose any of the different withdrawal options offered by the lender. |
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