You've decided you need a little extra help to meet your monthly financial obligations. A reverse mortgage is one of the best options for people over the age of 62 who own their own home. Instead of you giving money to the bank every month, the bank will send you money. The loan can be taken out as a lump sum, a fixed monthly payment, or a line of credit. You don't have to pay back the loan until you sell your home or move out for good. You can get information about reverse mortgage loans from a number of places, such as banks and credit unions. Rates may be different, so you should check with several banks before making a choice. There are different kinds of reverse mortgage loans, such as the ones below:
Home Equity Conversion Mortgage (HECM) loans are the oldest and most popular type of reverse mortgage loans. The Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development, is in charge of insuring them. The amount of money you can get from a reverse mortgage loan depends on how old you are, how much your home is worth, the interest rates at the time, and where your home is located. The loan amount can be higher if you are older and have more equity (the difference between what the house would sell for and what you still owe on it). In 2006, the most you can borrow for a home in a low-cost area is $200,160, while the most you can borrow for a home in a high-cost area is $362,790.
The Fannie Mae Home Keeper is another type of reverse mortgage that you can get from a lender. Fannie Mae is the biggest investor in home mortgages and reverse mortgages in the country. Fannie Mae made its own reverse mortgage product as an alternative to the HECM to meet the needs of people whose homes were worth more. Because the mortgage limit is higher for Home Keeper loans, they can be bigger than HECMs. The Home Keeper for Home Purchase programme is another product from Fannie Mae that has to do with reverse mortgages. This is for seniors who want to buy a new home with a reverse mortgage loan. Say someone sold his house for $60,000 more than he paid for it and wants to buy a new one for $100,000. He could use the money from a Home Keeper loan to get a reverse mortgage so that he wouldn't have to use his savings to buy the more expensive home.
You can get a loan against the value of your home from a reliable reverse mortgage lender in a lot of different ways.
