Monthly Archives: September 2008

When the Reverse Mortgage Ends

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The reverse mortgage loan will end if one of the following things occurs:

1. When the homeowner dies

2. When the homeowner sells the house

3. depending on the loan conditions

4. When the homeowner moves out of the house for 12 consecutive months

 

Here is some information related to the end of the loan:

1. The example for option number four can be go into an assisted living home or due to physical or mental illness the borrower is not able to live in the property on which the loan has been taken.

2. If this is happening then the reverse mortgage can be paid off with the proceeds of the sale of the house.

3. If the homeowner has died, the property can be refinanced by the heirs of the homeowner’s estate with a regular mortgage.

4. If the proceeds exceed the loan amount including compounded interest and fees, the owner of the house receives the difference. If the owner has died, the heirs receive the difference. For cases where the proceeds are not sufficient to pay off the loan, then the bank absorbs the difference.

5. In most cases when the borrower moves out of the property or dies, as long as the borrower (or his estate) provides proof to the lender that he/she is attempting to sell the home or obtain financing to pay off the outstanding debt, the investor will allow him up to one year to do so. After the one year extension period is up, the lender cannot provide any further extension of time to the borrower (or estate).

Reverse Mortgages Requirements in the United States

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If you are US citizen and are planning to take the reverse mortgage then there are several requirements you should meet. They are:

1. You must be at least 62 years of age.

2. Before borrowing, you must seek third party financial counseling from a source which is approved by the Department of Housing and Urban Development (HUD). The counseling is a safeguard for the borrower and his/her family, to make sure the borrower completely understands what a reverse mortgage is and how one is obtained.

3. You must pay off any existing mortgages with the proceeds from the reverse mortgage and, if needed, additional personal funds.

Reverse Mortgage

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Do you always worry about your children? Do you always thinking what will happen to them when you pass away someday? Well, this kind of feeling is actually natural and this is proving that you love your children so much.

 

But you can do something about it. You can consider on taking a reverse mortgage. The reverse mortgage is known as lifetime mortgage in UK. So, what is reverse mortgage anyway?

 

Reverse Mortgage is a loan available to seniors and is used to release the home equity in the property as one lump sum or multiple payments. If you are taking this mortgage, then your obligation to repay the loan is deferred until you die, your home is sold, or you are leaving.

 

Taking the reverse mortgage means that you won’t make any payments and all interest is added to the lien on the property. If you receive monthly payments, or a bulk payment of the available equity percentage for your age, then the debt on the property increases each month.

 

It would be possible to acquire a second reverse mortgage over the increased equity in the home if the value of your home is increasing. So, you don’t have to worry about it. But in the United States, a reverse mortgage must be the first and only mortgage on the property.