It is a mortgage designed to allow people over 62 who have equity in their homes to take that equity out and use for almost any purpose.
A reverse mortgage does not require monthly payments like a conventional loan. Instead the principal amount of the mortgage grows monthly. In general, that principal amount is
No, a reverse mortgage is merely a loan against the home. The title remains in the borrowers’ name.
When the loan is over, you or your heirs must repay all of your cash advances plus interest.
Lenders don't want your house; they want repayment.
In most Connecticut real estate transactions the contract is signed without attorney review. If you have not signed a contract, you may want to have your real estate agent include a provision in any contract you sign that allows you to have us approve your contract.
Your contract will contain a closing date which a GUESTIMATE. The actual date of closing may be a days or weeks earlier or later than the date on the contract. If you to MUST close ON a specific date, tell us immediately.
You can use the money you get from a reverse mortgage to pay the various fees that are charged on the loan. This is called "financing" the loan costs. The costs are added to your loan balance, and you pay them back plus interest when the loan is over.
US Treasury Securities adjusted to a constant maturity of one year plus 1.5%
With a reverse mortgage, you remain the owner of your home just like when you had a forward mortgage. Just like a regular mortgage, your estate will likely sell your home, payoff the mortgage and distribute the remainder to your estate and theirs.
The amount of money you can get depends most on the specific reverse mortgage plan or program you select. It also depends on the kind of cash advances you choose. Some reverse mortgages cost a lot more than others, and this reduces the amount of cash you can get from them.
Within each loan program, the amount you can get generally depend on your age, the current interest rate, your home's value and where you live
Reverse mortgages generally must be "first" mortgages, that is, they must be the primary debt against your home
The debt you owe on a reverse mortgage equals all the loan advances you receive (including any you used to finance the loan or to pay off prior debt), plus all the interest that is added to your loan balance. If that amount is less than your home is worth when you pay back the loan, then you (or your estate) keep whatever amount is left over.
Your estate will not be required to pay debt beyond the fair market value of your home because you buy “mortgage insurance” as part of your closing costs. For example, say your home is worth $100 in 2004 when you take out a reverse mortgage for $50. If your debt increase to $110.
All reverse mortgages are due and payable when the last surviving borrower dies, sells the home, or permanently moves out of the home. (Typically, a "permanent move" means that neither you nor any other co-borrower has lived in your home for one continuous year.)
After closing a reverse mortgage, you have three days to reconsider your decision and may cancel the loan without penalty.