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Posted in If you are not getting any younger and you would like to experience the finer things in life, then a reverse mortgage may be able to help.
A reverse mortgage allows you to take out a loan based upon the equity that is tied up in the home. Giving you either multiple payments or one lump sum; whatever suits you the best.
How a Reverse Mortgage Works
A reverse mortgage loan is only available to those who have already paid off their mortgage. You do not have to pay it back until either:
- The owner is deceased
- You enter a care home
- You leave the property
This is different to a normal mortgage in the fact that you make no payments and any interest will be added on top of the repayments once the house has been sold. If the owner decides to have a monthly payment instead of a lump sum, then this will increase the debt on the house.
Some people find themselves in the position that house prices have increased since they have taken out their reverse mortgage. So in some cases they can take out a second reverse mortgage. However, this will only apply in certain circumstances so you will need to find out more about this to see if you can qualify.
Requirements Needed to Get a Reverse Mortgage
If you want to take out a reverse mortgage then you need to be at least 62. That is the only main requirement. However there are other requirements that you will need to meet in order to be able to get the loan.
Most of the time, these types of loans allow the borrower to use the money for any purpose. The problem is however, that you need to pay off your existing mortgage if you have one with the loan. So consider this if you are thinking of applying for a reversed mortgage.
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