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KikyLife - If you own your home, are 62 years old and have a lot of equity in your home you can easily qualify for a reverse mortgage. Retirement can be tough financially, you can find yourself trying to live on a lot less money than when you were working. If this is your situation then talk to your bank about converting the equity in your home into cash.
You will no longer have to make payments to the bank or mortgage company, they will make payments to you. If that is the way you have set it up. You have the choice of taking the money in one lump sum, as a line of credit or receiving monthly payments. Make your retirement everything you thought it could be and talk to your lender about a reverse mortgage. You can also choose to receive monthly payments and have an amount set aside as a line of credit to use for the upkeep of the home.
The difference between this and a traditional mortgage is the loan does need to be repaid until you, as the homeowner, do not live in the home anymore. You can use the money for anything you want or need. There are no income limits to be eligible and like I said all you need to qualify is to be 62 and have plenty of equity in your home.
Other requirements are you must continue to live in the home as your primary residence. The money can be used to pay off the original mortgage if there are any payments left to be made. You, the homeowner, must keep taxes and insurance on the home and do normal upkeep of the home.
Your single family home is not the only type of home that can qualify for this type of loan. If you live in a multiple unit dwelling and live in one of the units this can qualify, too. Manufactured homes and approved condos can also qualify as long as they meet FHA and HUD requirements.
The loan will come with fees like origination fees and closing costs so it would be to your benefit to shop around for the best rates to keep as much money in your pocket as possible. Only when you sell your home or can no longer live in it will the loan have to be repaid. You will also have to repay the interest that has accrued. If there is any equity remaining after the repayment of the loan that money goes to you or your heirs in the case of your death.
The amount of a reverse mortgage depends on how old you are and the current interest rates. To arrive at a fair number your house is appraised and that appraisal is then compared to the FHA mortgage limits in your county and the amount you are able to borrow is the lesser of the two. As your age increases so do the amount of cash you qualify for.