Many seniors today have heard about a reverse mortgage, but they do not fully understand how this type of home mortgage works. This is a type of mortgage that allows a homeowner to take equity out of his home and that does not require mortgage payments for many years. There are many benefits associated with a reverse mortgage that seniors can enjoy. Learn more by visiting MortgageRates.ca or reading the information below.

• No Payments:

One of the most attractive features of a reverse mortgage is that there are no monthly payments associated with this loan. The loan repayment is due in a lump sum many years down the road. Upon closing, you can receive cash equity out of your house, and this can be used for any purposes that you need. Whether you currently own your home free and clear or have a traditional mortgage in place that you are struggling to pay off with a fixed senior’s income, refinancing your home with a reverse mortgage will yield no monthly mortgage payments.

• Live on Equity:

Seniors often live on a fixed income, and any additional cash that can be used to supplement their income is beneficial. Many seniors are sitting on a nest egg in the form of equity in their home, but they don’t want to sell their home. A reverse mortgage allows you to pull equity out of your home without having to sell your home. Through this mortgage, you can supplement your income and remain in your home. This can improve your quality of life and ease financial concerns.

• Paying Off the Mortgage:

There are various reverse mortgage programs available. Some can remain in place for only 5 years, but others may have a term of 10 or 20 years or longer. You can sell your home at any time to pay off your mortgage, or you can sell it when the mortgage is due. A home will generally increase in value from year to year, so there often will be additional equity in the home at the time the mortgage is due.

Once you understand how a reverse mortgage works and the many benefits that this type of loan can provide, you may consider talking to a lender or mortgage broker about how this loan may help you specifically. With Canada mortgage rates so low, now is a great time to apply for a mortgage and ease your financial concerns with a reverse mortgage.

Great Resources:

http://www.ftc.gov/bcp/edu/pubs/consumer/homes/rea13.shtm

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hecm/rmtopten

This entry was posted on Tuesday, November 27th, 2012 at 3:33 pm and is filed under Mortgage, Reverse Mortgage. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.