Important Facts About Reverse Mortgages

Despite the growing popularity of the reverse mortgage, some of the most basic facts about the reverse mortgage remain widely misunderstood. This article offers you some answers to a few of the most commonly asked questions.

The amount of money you can receive depends on a few factors, and these include one's age, the value of one's home, the amount of home equity that built-up in your property, interest rates, and the payment options as well.

You need to keep in mind that by getting a reverse mortgage, you do not give your home over to the bank. You stay the owner of your home and retain title throughout the life of a reverse mortgage. Even if the money runs out, you can continue to stay in your home as long as you wish. Of course as the homeowner, you will be responsible for keeping up payments on your homeowner's insurance and property taxes, and for maintaining the condition of your home.

The must be repaid once the borrower permanently moves out of his or her home or passes on. Your heirs can pay the balance due and keep the house if they wish to do so, or sell the home and use the proceeds to pay off the reverse mortgage.

The amount owed will include the amount borrowed, the accrued interest, service fees, and any other costs or fees financed as part of the loan. There is no way that the repayment amount exceeds the value of the home at the time the loan is due.

Many of the costs associated with a regular mortgage will also apply to a reverse mortgage. You'll be charged an origination fee, an appraisal fee, as well as other standard closing costs.

You need to know that a reverse mortgage doesn't affect your regular Social Security or Medicare benefits, but it may affect the benefits you receive from the federal Supplemental Security Income program or from state-run programs such as Medicaid.

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