Reverse Mortgage

What is reverse mortgage?

A reverse mortgage is a loan where the lender pays you the instalments instead of you making the payments to the lender. Reverse mortgage comes in great use for the senior members of the society or those who are 62 years and above of age. It is a powerful tool that enables you to raise money against the equity you have invested in your house.

Eligibility criteria for a reverse mortgage

To be eligible for a reverse mortgage, you need to be 62 years and above of age. Then again, there should not be any outstanding lien against your property. If you have any current debts against your property, you need to pay them off first before you take a reverse mortgage or from the funds of the reverse mortgage.

How does a reverse mortgage work?

As part of the reverse mortgage process, a lender company will purchase the equity in your home and give you the money in monthly instalments, in one lump sum or in a combination of both. You do not have to vacate your house and can continue to live in it for the rest of your life. If you are married, your spouse can continue to live in the house for the rest of the life even once you are gone. After your death, your children can pay off the rest of the loan or the lender company can sell it off to release the debt.

How much money can you raise through a reverse mortgage?

The amount of money you can raise will depend on a number of factors including your age, current rate of interest and the value of your home. The more your age and the more the value of your house, the more money you can raise from a reverse mortgage.

How will you get the money from reverse mortgage?

This will depend on the option you choose. You can take the money in one lump sum, multiple payments, or monthly instalments or a combination of any of these. Some people also choose to have the money as a line of credit, which means they can draw from the funds when they need to.

When to pay back the loan?

The money is paid back when the last surviving owner of the home passes away, sells the home or moves from the home permanently.