Mortgage Loans And Refinance For Bad Credit

What is a Reverse Mortgage?

A reverse mortgage is intended for homeowners over 62 years of age that need access to money.  The home must be owned outright or have a low balance on the existing mortgage and it must serve as the chief residence of the borrower.  It must also be a single-family home.  Reverse mortgages can be secured in three different types, depending on your specific needs and circumstances.  Before you select a reverse mortgage lender, you’ll want to understand the different types of loans available.

The three types of reverse mortgages are:

• Single-Purpose Reverse Mortgages—Usually offered by non-profit organizations or government agencies, this type of reverse mortgage is the least expensive option available.  The proceeds from the loan can only be used for the purposes specified by the lender and they are not available everywhere.
• Federally Insured Reverse Mortgages—Offered by the Federal Housing Administration (FHA), this type of reverse mortgage is backed by the US Department of Housing and Urban Development (HUD).  They are available everywhere and have no income or medical requirements to qualify.  There are restrictions on the amount of money that can be borrowed.
• Proprietary Reverse Mortgages—These are private loans offered by private lenders.  Depending on the company from which the loan is secured, there will be different qualifying factors and requirements.  The proceeds from the loan can be used for any purpose and are a good option for many borrowers.

Like all loans, reverse mortgages will also have interest that must be repaid.  The interest and fees can be higher than a standard mortgage, and will also vary based on the type of payment you select for receiving the money.  The borrower can choose to have the money paid out in several ways, depending on their specific needs and the type of reverse mortgage lender selected.  Typically, the money can be dispersed in a lump sum or in monthly payments, but the lender can explain the options based on your circumstances.  Selecting the right reverse mortgage lender will make a huge difference in the terms of the loan and your ability to pay it off.