First Priority Financial
Borrowers age 62 and older can qualify for a reverse mortgage either on their existing home or to purchase a new home. Reverse mortgages were developed to give seniors the ability to stay in their home or purchase a home without a monthly mortgage payment.
A reverse mortgage works opposite of a typical mortgage (referred to as a “forward” mortgage) in that the interest from the monthly payment is added to the total loan amount owed hence what is owed goes up, in “reverse” rather than down, as in a regular mortgage. The idea is that as the home increases in value over time, the amount due stays at a level below this value.
Our current economy has shown that values are not guaranteed - but not to worry. The owner can stay in the home as long as they want, as long as they live on the premises, even if more is owed than the home is worth. If they decide to move, or their family takes over the property, then if the home is worth more than the loan, it can be sold or refinanced to pay the loan. If the home is worth less than what is owed, then it is deeded back to the lender. Mortgage insurance guarantees that the homeowner and or their heirs will not be responsible.
The requirement is up to 60% equity in an existing home or as a down payment. No credit or income qualifications. This is a great financial tool. Check it out!