Today you are going to find rising cost in just about everything; food, gasoline, medical expenses and even mortgages. This is highly affecting everyone, but one group it is extremely hurting is senior citizens, or people over the age of 62. With all the inflation, some seniors have to decide between paying their mortgages, or purchasing food and medicine instead. With a decision like this more of the seniors are coming close to or facing foreclosure.
The Reverse Mortgage is an option designed for seniors, 62 or over, that will convert part of the equity in their homes into tax-free income, saving many from going into foreclosure. A reverse mortgage requires no income or credit qualifications, so if you are behind on your payments and the lender has filed a default notice, you can still qualify. If you do qualify you will never have to make another payment for the rest of your life.
Reverse Mortgage Criteria
Okay so you know if you qualify you will be payment free but there is other criteria you will have to follow with the reverse mortgage.
• You must be 62 or older
• Your property must meet the minimum requirements set by HUD and must be an acceptable property type
• Acceptable property types: Single family home, town homes and modular homes on permanent foundations and condominiums. If you own a home that is single family detached home, this is something you will want to let your reverse mortgage lender know. Also if you have a homeowner’s association, your zoning is not residential or the property contains excess acreage, the lender will need to know this as well.
• Your property has to be well maintained, with no major repairs needed. Some one will come and inspect your property, so get anything repaired before hand, remember if you are approved for the reverse mortgage you may not have to make another payment for life. So it will be worth putting money into a few repairs if needed.
• Borrowers cannot be in default on federal obligation or federally insured loans. For instances if you are in default with an SBA loan, an FHA insured mortgage or other federal obligations, you will not be eligible. If you have an FHA loan that is not in default though, you can still qualify. If you are in default you would have to have the funds to bring the mortgage current before trying to get approved.
Once you are approved for a reverse mortgage you can choose the way you would like to receive the money. You can take it all as a lump sum, fixed monthly payments either for a set term or for as long as you live in the home, as a line of credit, or a combination of these. The money you do receive from a reverse mortgage can be used for anything; whether it is to supplement retirement income to cover daily living expenses, repair or modify your home, pay for health care, pay off existing debts, buy a new car or using it to avoid foreclosure the choice is yours.
The main thing to remember with a reverse mortgage is that is a long-term solution, that will take time to process, but it is worth putting the energy into, if you want to stop foreclosure. It will take time to process your request things will need to be done such as a property appraisal, title and trusts must be reviewed etc. So practice patience and just realize after being approved you won’t ever have to make another mortgage payment.
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