The reverse mortgage is the type of mortgage loan that a homeowner can borrow against the value of his/her home. There is no requirement of repayment of mortgage till the homeowner dies or the home is sold.

After accounting for the initial loan amount, and other important factors, the transaction is structured so that the loan amount does not exceed the home value over the life of the loan.

There are many mortgage companies those provide such mortgage loans. Due to the increasing demands of people, there has been emergence of many private mortgage providers. Hence, when you are applying for the mortgage, it is important to make necessary enquiry for the reputation of the loan provider or you may end in trouble.

Loans are required for satisfying the immediate needs of the people. With the help of the mortgage loans, they get the complete amount at a time for fulfilling their sudden demands and they can pay back the loan amount later with the charge of some pre-decided interest rates.

Reverse mortgage is one such type of mortgage that is given to senior citizens above the age of 62. One doesn’t have to repay the loan amount till he dies or sells the home.

To be eligible for the reverse mortgage loan, the person should possess his own house and he should be aged more than 62. He should have the single family home or a 1-4 unit home with one unit occupied by the borrower.

Reverse Mortgage

The reverse mortgage is the income that people can strike into for their retirement. The major advantage of reverse mortgage is that the loan provider will not check the borrower’s credit history for lending the loan as borrower doesn’t have to make any payments.

As the home serves as the guarantee for the mortgage loan, it is sold for repaying the loan amount after the owners death.

Some important features of reverse mortgage loans are described below.

Reverse Mortgage Features:

Any house owner above the age of 62 is eligible for getting the reverse mortgage loan

The loan amount is 60% of the total value of your home.

The maximum loan period for the property mortgage is 15 years as decided by the bank or a housing finance company.

Amount received from the reverse mortgage is considered as loan and not as income. Hence you will not be charged for any tax amount on such loan.

The reverse mortgage rates are fixed or floating. Hence, they will vary according to the market condition and depend on the interest rate chosen by the borrower.

The reverse mortgage loan can be in the name of two borrowers (generally husband and wife). If any one of the spouses dies, the other can still continue to live in the house. If both of them die, bank provides two options for their heirs – either they can settle the entire loan and retain the house or bank will sell the house, settle the loan and give the remaining share to the heirs.

The reverse mortgage loans are best for the people possessing homes but don’t have anyone to care for them. Such loans can help to fulfill their needs when they lose their earning ability.