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Benjamin Said:

someone WHO CAN EXPLAIN TO ME WHAT!!!?

We Answered:

A Reverse Mortgage lets you access a portion of the money your house is worth without any payments due until you move out or die. The Deed remains in your name. The Government does not make the loan, although the Lenders have to comply with strict guidelines. The house does not "go to the Bank when you die". Your heirs can refinance or sell the home, paying off the Reverse Mortgage and the interest and fees that will accumulate during the time you have the Reverse Mortgage in place. The amount of a Reverse Mortgage is usually 60% or less than the value of the home, so the chances are slim that you will owe more than the value of the home when the Mortgage is due.

When you apply for a Reverse Mortgage the Lender calculates the amount of the loan based on the appraised value of your home and your age. The older you are (you & anyone else on the Deed have to be at least 62) the higher the percentage of the value of your home you can qualify for. The calculation is done based on the youngest person on the Deed. Lenders will want you to use whatever portion of the proceeds necessary to pay off any existing mortgages. You can use the balance of the proceeds of a Reverse Mortgage in any way you wish. You can pay off debts, make home improvements, establish a stream of income, go to Disneyworld or take a trip to the Mother Land if you care to.

So lets say you have a home worth $200,000 and you owe $100,000 on your existing loan.The Lender offers you a Reverse Mortgage in the amount of $120,000. You can use the funds to pay off your existing mortgage and no longer have a mortgage payment, instantly increasing your discretionary income by the amount of your old monthly payment. The balance can be taken as a lump sum, left as a line of credit, set up as monthly payments to you, or whatever arrangement you desire.

Go to a reputable lender's web site (like Wells Fargo) for complete information.

Andy Said:

Sell of property under mortgage?

We Answered:

The property is sold to the bank and they are making pre arranged payments to your Father and allow him to live there. Thats how reverse mortgages work. Sorry.

Erika Said:

Question about mortgage?

We Answered:

It's a backwards mortgage, and basically works completely in reverse from a conventional mortgage. In a conventional mortgage, you sign a bunch of papers, using a home as the collateral or security, and get a wad of cash. You then pay the loan back over a period of years, with interest added on as you go. With a reverse mortgage the opposite occurs: You sign a bunch of papers just like in the conventional loan, but instead of getting a wad of cash up front from the lender and then paying the lender back, you get nothing up front and the lender pays YOU monthly payments over a period of years or until you die. Usually one restriction of a reverse mortgage is you have to be at least 55 to apply for it. As time goes on, the lender makes monthly payments to you, which is like income to you, and the amount you owe the lender grows bigger and bigger and interest is added just like in a conventional mortgage. At the end of the term of the loan the property has to be sold to repay the loan. If the borrower dies before that time, the estate sells the properrty and the loan is repaid.

So as you see a reverse mortgage is exactly what it sounds to be.