Many senior citizens are struggling these days as pension plans are being cut and medical bills begin to pile up. There is an option for senior citizens that allows them to access the equity in their home and convert it into a monthly stream of income. This option is often referred to as a reverse mortgage or equity conversion home loan. With a reverse mortgage, you can eliminate your monthly mortgage payment and receive a guaranteed stream of income each month.
In order to qualify for a reverse mortgage, you must be at least 62 years of age or older and own your home. Your home does not actually have to be paid off; however, you must have an equity position in your home. Once you accept the reverse mortgage, the remainder of your mortgage balance (if you have one) will be paid off and you will begin to receive a monthly check for an agreed amount. The amount that you receive each month will generally be larger the older that you are and the more equity that you have in your home.
You will still own your home with a reverse mortgage. This means that you will still be responsible for insurance, taxes, and upkeep of your home. Your home will never be taken away. Once you pass away or move into a new home, your loan becomes due. If you pass away, your heirs can sell your home, pay off the loan, and collect any remaining equity in your home.
The reverse mortgage loan has been helping senior citizens for years by supplying a tax free stream of supplemental income each month that can be used for anything. If you are interested in applying for a reverse mortgage, there are several lenders who are willing to speak with you about how much you should expect from a reverse mortgage.
Author: John Zinsky