Reverse Mortgage
     An Alternative     

Reverse Mortgages are gaining recognition among those of us who have worked over years to have a place to live without monthly payments.

A paid off mortgage is a "sigh of relief" to seniors who remember when a 30 year mortgage seemed like it would last forever.  Thirty years, plus, have flown past.

A Reverse Mortgage is almost an unthinkable idea but it is a product that has been provided through the same agency that gave us the 30 year fixed mortgage that seemed like a terrible debt at that time.

A Reverse Mortgage is a loan against the equity in the home that allows for tax free cash advances, but requires no payments during the lifetime of the loan, the balance owing grows larger with interest accrued and equity may decrease against the property appreciation.  Either way, the borrower will never own more than the amount agreed to even if the house were to lose value for some unforeseen reason.

The loan is not due or payable until the borrower(s) no longer occupy the home as a principal residence, e.g. the last surviving borrower sells, moves out permanently or passes away.  Payments can be made on the loan if some unexpected cash were to arrive.

Borrowers must be at least 62 years of age and own the property as a principal residence in order to qualify for a Reverse Mortgage.  There are no income or credit requirements.  Based on the amount of benefit qualified for, borrowers may borrow even if there is a first mortgage or even pay off the first mortgage to be rid of monthly payments.

The funds borrowed can be used for anything and can be withdrawn as a single lump sum, monthly payments or a combination of both. 

Amounts of the loans are dependent on age, value of property, current interest rates and for some products, location of property.  In general, the older the borrower(s) and the greater the equity, the larger the Reverse Mortgage amount can be.

Costs of the loan are similar to any conventional loan and are included in the amount of the loan applied for. 

Borrowers must first meet with an independent Reverse Mortgage counselor.  It is the counselor's job to educate the borrowers on the pros and cons of the loan before it is applied for.  The session is a no cost event and can even be done by telephone.

If you are thinking about a cash shortfall and need some assistance, a Reverse Mortgage may be "the Alternative".

For more information:  Dee Klein, ALTA Financial
(888) 450-ALTA
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