New England Properties: What Is A Reverse Mortgage? (Part 7)

What Is A Reverse Mortgage? (Part 7)

What Is A Reverse Mortgage? (Part 7)
A 12 Part Series

Part 7 - Loan Limits and Distribution of Money of Reverse Mortgages

The maximum loan amount that is available through a reverse mortgage depends on five factors: 

  • the age(s) of the homeowner(s) - the older, the better;
  • the current interest rate - the lower, the better;
  • the appraised value of the home - the higher, the better;
  • the remaining mortgage balance (if any) - the lower, the better; and
  • location - which you can't do anything about.

Distribution of Money from a Reverse Mortgage

There are several ways to homeowners can receive the proceeds of a reverse mortgage. Homeowners can mix and match as needed.

You have five options:

  • Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
  • Term - equal monthly payments for a fixed period of months selected.
  • Line of Credit - unscheduled payments or installments at times and in amounts of your choosing until the line of credit is exhausted.
  • Modified Tenure - combination of line of credit with monthly payments for as long as you remain in the home.
  • Modified Term - combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.


Next - Part 8 - Using a Reverse Mortgage to Purchase a Home


Part 1 - Definition of a Reverse Mortgage
Part 2 - Reverse Mortgage Eligibility Requirements
Part 3 - Myths and Frequently Asked Questions of Reverse Mortgages

Part 4 - Pros and Cons of a Reverse Mortgage

Part 5 - Reverse Mortgages, Income and Taxes
Part 6 - Outliving the Reverse Mortgage


If you're 62 or older and are looking for money to finance a home improvement, pay off your current mortgage, supplement your retirement income, to pay for healthcare expenses, or even to buy your retirement home, then consider getting a reverse mortgage. Find out how a reverse mortgage can use the equity in your home to pay you.

 

Lew Corcoran
Licensed Real Estate Professional

Best Choice Real Estate Services
133 Turnpike St, South Easton, MA 02375
Phone Toll-Free: (800) 984-3341

Serving Easton MA and the Surrounding Area

 

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1 commentLew Corcoran • November 30 2009 01:47PM

Comments

Can't wait for your next blog about Purchasing a home with Reveerse Mortgage money.  I am working with a client doing that.  Seems complicated, but i am leaving it all up to the lender.  I will watch for your upcoming post.

Posted by Jean Hanley (Coldwell Banker Kivett-Teeters) over 2 years ago

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