|
|
|
|
|
| |||||||||||
But did you know that there is such a term as a reverse mortgage? Yes. This particular type of financial option is specifically designed for senior citizens. So, what is a reverse mortgage? The term gives it away. Simply said, a reverse mortgage is a type of loan that gives you money in exchange for a mortgage of your house. Indeed, this is a reverse of the typical mortgage loan because here, you are like "selling" the value of your home to your lender. In effect, at the end of the term of the reverse mortgage, the title of your house is transferred to your lender. The Requirements To be able to avail of a reverse mortgage, you need to: a. Be at least 62 years old b. live in your house c. attend a third party counseling session - this ensures that you, as the borrower, fully understands the extent of the situation. Credit standing and history almost has no bearing on your eligibility for a reverse mortgage. The requirements also gets more lenient as you age, given than mortality rate increases with age. Proceeds of a reverse mortgage may come in any of the following arrangements: a. in lump sum b. in monthly payments - this is only true when you are still living in your house c. as a line of credit - a commitment to make a loan in the future The Advantages Just like any other mortgage, Toronto or elsewhere, a reverse mortgage could be the answer to your immediate substantial cash needs. When there is a large hole in your pocket that needs mending, then resorting to this financial option may be a good thing. Also, the lender can only exercise his mortgage on your house if you pass away or if you move out. One more thing, you also get to keep the title of your house until the end of the "term." The Disadvantages A reverse mortgage is a high-cost loan. For instance, in the United States, almost 10% of the value of the house goes to origination fees and insurance fees. Therefore, if the proceeds of your mortgage totals to $250,000, $25,000 of which shall be eaten up for the said fees. That's huge! There are also some cases when payments from a reverse mortgage could affect your eligibility for some government assistance programs. This therefore necessitates that you have a full understanding of what's at stake here before signing any reverse mortgage agreement. Explore Other Options While a reverse mortgage looks like a good alternative in getting that needed cash right now, it is not always the best choice. It is a sound choice considering that at your senior years, you are not anymore as active in the workforce as you were 20-30 years ago. And the presence of many other financial options should at least prompt you to check them out. Shop for more alternatives. Surely, there will be one option out there that will be most beneficial to you. There are others out there that are less costly than a reverse mortgage. Allegro Mortgages Corp. – Best Broker for All Your Financing Requirements (416) 987-0008
Article Source: http://www.bharatbhasha.net Article Url: http://www.bharatbhasha.net/finance-and-business.php/234773 Article Added on Tuesday, April 27, 2010
| |||||||||||
|
| |||||||||||
| Business And Finance >> Top 50 Articles on Business And Finance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Category - > | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
