What Are Reverse Mortgages?

By Author: Brad Cullipher
Total Articles: 83
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Over the past decade, more and more focus in the mortgage world has been given to reverse mortgages. This news, unfortunately, has been primarily negative, showing poor, unsuspecting homeowners losing their homes because of bad mortgage people selling them a bill of goods that they did not completely understand. This is unfortunate though, as the actual program of reverse mortgages was started to help people, not hurt people. There is a huge misconception in the American public of reverse mortgages saying how bad they are, when in all actuality, many people benefit greatly from the use of a reverse mortgage if they fully understand it.

Reverse mortgages can be quit complicated, but simply put, reverse mortgages allow people who either own their home free and clear, or who have tons of equity in their homes, to draw against that equity to make the payments. This does, in the end, result in the bank owning the home, but in many instances, allows elderly people to stay in their homes longer and actually take an income, rather than being forced to leave their homes because they are not earning enough money to pay bills for ...
... their basic necessities.

To get all of the details on reverse mortgages, it is of course necessary to talk to a mortgage professional. Some people qualify and some do not, and it is of course necessary to understand the full consequences of such a decision. But for elderly people who want to continue living at home but do not have the money and they do not have anyone they want to leave their homes to in the end, this is a great decision. They may be able to live at home for 20 more years while they age instead of moving out. This allows an elderly person to convert the home equity they may have accrued over many years into a source of cash, which may help them to support their social security income and maintain a healthy lifestyle.

Many people can also use a reverse mortgage to take out cash for home repairs. Some people choose to remove a fixed amount from the mortgage, and others choose to take a monthly payment through the use of a reverse mortgage to satisfy their needs.

Reverse mortgage programs are available through both private lenders, and through the government FHA program. Because there are many people out there who have scammed elderly people into making uninformed decisions, it is extremely important to consult with some who you trust, and to get other family members (like your children) involved in this kind of decision. To qualify, you must be over the age of 62 and either have a paid off mortgage or very little left to pay. You also must live in the house as your primary home, and be primarily up to date with other creditors to qualify.

So although reverse mortgages have been given a bad name over the past several years, in the right circumstances, they can be extremely helpful to elderly people, and will allow them to enjoy their late years versus giving up the home they have lived in all of their lives. It is again important to consult with a professional to see about qualifying and applying, as reverse mortgages vary from person to person.

American Capital Home Loans is your professional mortgage company specializing in home loans, mortgage, refinancing, reverse mortgages, debt consolidation, and home equity loans. Serving Austin, Dallas Mortgage, Houston, San Antonio, Ft Worth, and all of greater Texas.