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Yes, the reverse mortgages how they work? As such the reverse loans are simple products, but include many details which are not familiar to the senior citizens. A reverse loan is always a serious and long term decision and requires a specialist to guide. The income from the reverse loan is tax free. A senior can select, how the lender will pay to him, yes to him. The alternatives are the lump amount, credit line, monthly payments or the combination of all these. A senior can use the money as he will and there is no reporting. The lender will not ask the credit score or the monthly incomes, because nothing will be paid back on a monthly basis and the only guarantee for the loan is the equity of the loan and the obligatory mortgage insurance. 1. A Senior Does Not Have The Monthly Payments, Not Even From The Usual Mortgage. The reverse mortgages how they work? The target is to give extra cash for the seniors, who have as the only sources of money the equities of the home. If he has a usual mortgage left, he has to pay it away with the reverse loan. The loan capital, interests and costs will be paid back, when the loan will be closed. This happens, when a home owner will move away, sell the home or die. 2. Full Life Allowed. The social attitudes have been changed. Today it is allowed for the senior citizens to live the full lives, to travel and to have paid hobbies. And the seniors, who have planned their future lives can meet sudden increases in the living expenses, but they cannot increase the income. For these people the home equity can be the only source of extra income, which they can use with the help of the reverse mortgage loan. 3. A Senior Borrows Against The Equity Of The Home. The reverse mortgages how they work? The system goes so, that a senior borrows money against the equity of the home, where he must live permanently. But he will not pay anything on a monthly basis. The loan capital, interests and costs will be paid, when the loan will be closed. This happens when a senior will move away, sell the home or die. Additionally he has to take a mortgage insurance, which guarantees that he will never owe more than the value of the home. 4. Is The Reverse Loan Wise To Take? As said earlier, the reverse loan is a serious loan with a long term commitment. But it is a senior decision, whether he will take this loan or not. If the home equity is the only possible source of extra cash and he honestly needs the money, then just go on! 5. Who Can Give Guidance? A professional guidance is really valuable with this loan type. There are two kind of information needed. First the general information, then the information concerning the personal needs and rules from the state. The only reliable source of information comes from the federal counselor. He is an expert, who has specialized in these things. But to get the most out of him a senior has to prepare carefully and to make a list of questions. Juhani Tontti, B.Sc., Marketing. For more information about the reverse mortgages how they work, plus about the pros and cons of reverse mortgages please make a quick visit: HUD reverse mortgages
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