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| Question |
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How does reverse mortgages work?
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| By
putiekay |
Posted on
02/12/07 Total Answers
5 |
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| Answers- |
| You getted ripped off paying ridiculous closing costs, then get a payment and get to stay in your house until you die or the time elapses on your contract, then the mortgage company owns it.
A better idea is to sell your house, invest the money and move into an apartment. |
| Answer by :
The Man On Date
2007-02-12 16:24:14 |
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| In a reverse mortgage, you can get equity out of your home & not EVER have to pay it back, as long as you live, so long as you stay living in the home it's borrowed against. You can get this money in a lump sum, a line of credit or a set monthly amount for as long as you live. The basic rules are, first, of course, you must have unused equity in the home. Second you must be at least 62 years old. Be aware though, the upfront fees & cost are high. This is not a short term solution to money problems, or if you intend to move in less that 5 years. |
| Answer by :
Tater On Date
2007-02-12 16:28:10 |
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| Assume that you bought a house for $100,000 and twenty years later the house sells for $350,000. You have paid down the mortgage to $50,000.
Your home has a value of $300,000. If a 20 year mortgage is written on it for 7.5%, you would get about $3,000 per month for 20 years (you would still have to pay the $50.000 original mortgage). If you die, your Beneficiary, if they sell the house will owe the (Interest) that you were given while you were alive. The balance is theirs. The property is yours at all times, you are free to sell it at anytime, once sold the funds advanced to you are due & payable.
THIS IS NOT THE DEFINITIVE ANSWER TO YOUR QUESTION, BUT IT IS A START. |
| Answer by :
whatevit On Date
2007-02-12 16:40:37 |
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| First you need to be over 62 years old? because it is designed for seniors, a reverse mortgage is a loan that allows the homeowner to convert some of the equity in their home into cash or monthly income, while retaining home ownership. Reverse mortgages work much like traditional mortgages, only in reverse. Rather than making a payment to the lender each month, the lender pays the borrower. All persons on the title must be at least 62 years old and occupy the home as their principal residence. You must own your home "free and clear" or have a very small mortgage balance. Income is not required to qualify. Reverse mortgages do not have to be paid back until the last surviving borrower dies, sells the home, or moves out. The total amount owed at the end of the loan equals all of the cash advances you've received, plus the accrued interest.
If you want to go ahead with this contact a friend of mine at dotheloan@bellsouth.com, he could inform you better and help you with reverse mortgages
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| Answer by :
celia s On Date
2007-02-12 22:26:40 |
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| A reverse mortgage is one option seniors 62 and up can use to generate tax-free income. Basically, the bank pays you for the equity in your home (the reverse of a traditional mortgage.) When you (and any others on the title) die or move, the bank usually takes title to the property. Closing costs can be high, but many seniors find it worth the extra upfront cost since it means they can remain in the home they love for life.
This site has a nice overview of the pros & cons of reverse mortgages and is easier to read than something written in "banker-speak":
http://reverse.mortgageous.com/
If you have plenty of home equity and no need or desire to leave that equity for your heirs, a reverse mortgage is something to consider. There are generally no income requirements for you to qualify for a reverse mortgage (although you must be able to continue paying taxes, insurance, and home maintenance expenses.)
When it comes to reverse mortgages, research is your best friend - just be sure to get all the facts about a particular reverse mortgage product before making a decision. |
| Answer by :
jtlyr On Date
2007-02-14 14:00:29 |
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