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No, they do not, but can offer a very good help for the seniors. When the U.S.Government allowed the launch of the reverse mortgages, the idea was honestly to get financial help for older American so that they can turn a part of their home equities into cash money and thus to increase their standard of living. These senior people are a special group with their only assets being in their homes. So why not to use a part of the home equity, when a senior seriously need it? The reverse mortgages work in that way, that the old owners will keep the ownerships, so in this respect they work like the usual mortgages. 1. How Much Can A Senior Get? Actually the reverse mortgages will differ from state to state, but in all states it will depend on the three items. On the interest rate, on the appraised value of the home and on the age of the borrower. The absolute maximum of all reverse mortgages is $ 625.000. We can roughly say, that the older the borrower, the lower the interest rate and the higher the appraised value of the home, the more a borrower will get. It is important to remark in this context, that the reverse mortages are meant for the serious targets, so they are not free money from the thin air. Because there is no monthly back payments like with the usual loan, a borrower may get a feeling about a free money, but it is wise to remember that the money comes from the equity of the home. 2. Is This For A Short Term Use? The reverse mortgages are never for short term needs and never be handled as an easy money. They are like usual mortgages, for the long term commitments only. This means also that the target of this money should be compulsory, like a medical treatment. But in the end of the day nobody will ask, how a borrower will use the money. It is totally his own decision. 3. The Reverse Mortgages Are Full Of Details. This is true. The reverse mortgage terms are an area of the expert only. It is very clever, if a senior will meet the federal counselor, before he will sign anything. The counselor, who is independent, can guide a senior professionally and also to tell, whether the reverse loan is wise to take or is some other solution better. 4. How Many Owners And Borrowers Do They Allow? The law says, that there can be altogether three borrowers in the agreement. These borrowers must naturally be the owners, so that they can make commitments about the property. All borrowers must also meet the qualifications, i.e. to be American citizens and at least age 62. 5. Shall I Ask The Heirs? The reverse mortgage will decrease the amount of the heritage in all cases, so if the owner wants, he can tell about the agreement to his heirs. The heirs can also invent some other solution to the financial needs, which a senior has. Juhani Tontti, B.Sc., Marketing. Usually the reverse mortgage loan includes many details and a senior will do wise, if he will meet the reverse mortgage loan expert, a counselor, and will get the needed advices. Visit: reverse mortgages
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