Signing a reverse mortgage is a big commitment. Just like any other contract, there are terms and conditions that you may not understand, and they could cost you money in the future if you’re not careful. So be prepared; don’t sign on any contract until you’re sure that any questions you may have are answered.

* Why should I choose a reverse home mortgage over a standard bank loan or mortgage?

A reverse home mortgage is geared towards those who have already exited the workforce, and therefore don’t have a regular income. A loan or mortgage requires you to pay back the loan over time, where as a reverse mortgage is not paid until the home has been sold or the last surviving owner passes away.

* How do I qualify?

There are a few requirements: You must be 62 years old or older, own your home or dwelling, it must be your main residence, and it must meet certain property standards. If you and the property you intend to mortgage fit within these guidelines, you qualify for the mortgage.

* Will this income affect other benefits I receive such as Medicare or Social Security?

A reverse home equity loan will have no effect on your benefits. Since it is not considered income, and concurrently is not taxed, it will not have an effect on SSI or Medicare payments. It is a supplement to your current benefits, rather than a replacement.

* If I outlive my loan, can the lending company or agency take my home away?

Since you can never owe more than the value of the loan, you will not to pay the loan as long as a borrower is alive and taxes and insurance on the house is kept up to date. Hopefully these answers to some of the most commonly asked questions about reverse mortgage loans will help put your mind at risk.

    Posted in Mortgage from Investor on 2. Jun. 2010