| For a senior it is important to understand the key | | | | These loans are divided into three groups. In the first |
| features of the reverse mortgage loans, before he | | | | group there are the so called single purpose loans, |
| goes on, because some lenders have done false | | | | which only some states, governments and non profit |
| offers trying to utilize the seniors, who do not have a | | | | organizations will grant. These loans are the cheapest |
| full understanding about the reverse mortgage loans. | | | | ones. They are used for some specific purposes only, |
| If you think the differences between the usual | | | | like for home improvements. |
| mortgages and the reverse mortgage loans, they are | | | | The second class is the federally insured loans, |
| many. With the usual mortgage, the borrower has to | | | | HECMs, which are backed by the HUD. These are |
| have enough monthly income compared the loan sum | | | | slightly more expensive ones, but have no income or |
| and he has to pay back every month. With the | | | | medical limitations. Owing to higher upfront costs, these |
| reverse home mortgage loans the lenders pay to | | | | loans are recommended for a longer term use. The |
| borrowers and all the costs, interests and the capital | | | | federal counselor meeting is compulsory. The |
| will be paid back at the closing of the loans. | | | | proprietary reverse mortgage loans are backed by the |
| 1. How Much Will I Get? | | | | private companies. |
| Actually the reverse mortgage loans amounts depend | | | | 4. What Are The Costs? |
| on the interest rate, the appraised value of your home | | | | Usually the reverse mortgage loans offer tax free |
| and on your age. So you will get more the older you | | | | income and they have no influence on the Medicare or |
| are, the lower is the interest rate and the more | | | | social security. HECM allows the borrower to live in the |
| valuable is your home. | | | | nursing home for 12 months before the loan must be |
| 2. What Happens, If I Cannot Pay? | | | | repaid. |
| There is one good thing. All of these loans include | | | | Normally the lenders charge the origination fees, |
| obligatory mortgage insurances. The idea of these | | | | mortgage insurance premiums and servicing fees. All |
| insurances is to guarantee two things. First, that if the | | | | these fees will be paid when the loan will be closed |
| selling price of your home do not cover the whole sum | | | | and the home is sold. A borrower can select either the |
| of costs, the insurance will pay the difference. | | | | fixed or the variable interest rate. But remember, that |
| This means that you will never owe more than the | | | | you as the home owner must pay taxes, insurance, |
| value of your home. Second, the lender gets his | | | | utilities, fuel, maintenance and other expenses. If you do |
| money for sure. The mortgage insurance is very | | | | not pay taxes or insurances and do not keep the |
| important, if you think a risk that you could otherwise | | | | home in good condition, your reverse loan can be due |
| loose your home. This special insurance guarantees, | | | | and payable. When the loan is paid, you can deduct |
| that it will never happen. | | | | the interests in the taxation. |
| 3. What Types Of Loans There Are? | | | | |