3 Things That You Absolutely Need to Know About Reverse Mortgages

Have you grown old? Has the time for retirement finally here? Are you worried about how you will make ends meet after retirement? Well, you should not worry about it if you own a house and have paid all its mortgage payments. You can buy a financial product popularly known as reverse mortgage, and get paid against your house for the rest of your life. Here are three things that you must know if you are interested in buying a reverse mortgage.

Your Home Is the Collateral for a Bank
When you avail the reverse mortgage, you, the borrower, will be entitled to receive payment for your home. These payments will continue until you pass away. After this, the bank will hold a charge on your house, against which you purchased the reverse mortgage. The house will be sold at a fire-sales value and the total amount of money extended to the borrower over their life will be recovered. The remaining amount (if any) will be distributed among the heirs of the deceased borrower.

There Are Three Different Payout Option
Reverse mortgages offer you three different types of payout options to tap into your home equity. The most popular option is to receive fixed amount of money every month while you are alive. The second option is to receive all the payments as one lump-sum. The third option is a fixed line of credit. This means that the borrower will be eligible to withdraw a fixed amount of money every year in any pattern they wish.

Not Everyone Can Take Out a Reverse Mortgage
Reverse mortgages are relatively easy to obtain because the lender does not look at your credit score. The only thing that matters to the lender is the fair value of your house. But reverse mortgage cannot be taken out by every other person. The borrower must be retired and 62 years old or above in order to qualify for a reverse mortgage.

Longbridge financial is a lending company that specializes in reverse mortgages and is approved by the Federal Housing Administration (FHA). It operates in 46 states and is committed to providing financial peace of mind to the elder generation.