A qualifying homeowner takes out a loan based on his age, amount of the home’s equity, value of the home and the interest rate. The bank, or lender, pays the proceeds directly to the homeowner, or borrower, for use as she sees fit. Once the loan proceeds have been paid to the borrower, the homeowner has unlimited access to the funds and makes no payments to the lender. Instead of making regular payments as with a traditional mortgage, the bank loan is paid off when the property is sold. Any remaining equity in the home is paid directly to the borrowers or their heirs.
If proper care is taken to find a qualified lender and select loan terms that are satisfactory to both parties, a reverse mortgage can provide seniors with unexpected financial freedom. |
April 28,
