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Would you be interested if a lender would offer you monthly tax free infome? I bet you would. That is one of the many features about reverse mortgage loan. When you have to pay the ususla mortgae on a monthly basis, the reverse mortgage loan lender really pay you. This is the fact about reverse mortgage, which offers a better chance to take some cash out from your home equity, because the state will not eat a part every month. If you are age 62 or over and own the home, which is your permanent place of living, you are qualified for the reverse mortgage loan. There are no income nor credit criterion. 1. About Reverse Mortgage, Is It Really Tax Free? When you think this tax free issue about reverse mortgage, you have already once paid the taxes. It happened, when you earned the money with which you paid the price of your home. With the reverse mortgage you actually take away the money once paid. This operation does not influence on your social security or medicare entitlements. 2. A Useful Information About Reverse Mortgage Is, That You Will Stay The Owner of Your Home. This has also a financial meaning to you. As you know, the house prices increase over a long period of time as we can see from the stats. All these annual price increases are income to you. And if these annual price increases are higher than the interest rate for your reverse loan, you will make money with this difference. 3. You Can Select From Three Loan Types. A single purpose reverse mortgage loan. This loan type is meant for only one purpose. The lender will determine, which that purpose is. The target groups are medium and lower income people. Home equity conversion mortgage, HECM. This reverse mortgage loan is flexible and insured by the Federal Government. Additionally the Department of Housing and Urban Development, HUD, backs the loan. The HECM loan has slightly higher upfront costs. No income or credit information is needed. The Federal Government has one term for every applicant of the HECM loan. They have to meet the government approved housing counselor, who taylor make the terms and can recommend, which reverse loan is best. The counselor has an expertise to explain all the details item by item, before you will sign the agreement. If it happens, that the borrower must be in a nursing home or in other mediacl facility, only the HECM loan allows him to live there up to 12 months before the loan comes due. When you ponder the alternatives, this is really an important benefit. Think, what could happen with the other loan types! A proprietary reverse mortgage. This loan type comes from private companies and are not insured by the government. The upfront costs are higher than with the single purpose reverse mortgages. It is a normal thing about reverse mortgage, that the lender charges the origination fees, closing costs, insurance premiums and service fees which are all set by the lender. All costs will be told you before you sign the contract. By the way, the interest rate can be fixed or variable. If you choose a variable one, it will be tied to some financial index and will change. From the reverse mortgages the HECM is the most flexible, because there you can choose, how you will take the money out. You can take it as fixed monthly sums during a set period of time, as a credit line, as a lump sum or as a combination of all three. The key thing, and really important one, is to read about reverse mortgage and to understand all details and also alternatives to the reverse mortgages. The engagement is a long term one, so do not let the monthly income possibility to mislead your judgement. Juhani Tontti, B.Sc., Marketing. When You Ponder How Do Reverse Mortgages Work, Take Into Consideration, That They Are Tax Free Monthly Income. The HECM Is The Most Flexible One. Visit: About Reverse Mortgage
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