Important Things To Know About Reverse Mortgage In Colorado

By Author: Elevation Mortgage, LLC
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A reverse mortgage in Colorado Springs is probably the most misunderstood type of loan. This post aims to untangle the misconceptions about this loan and tell you the most important things you should know.

So, what is a reverse mortgage, and who is qualified to use it?

Simply put, a reverse mortgage in Colorado allows people to leverage the equity of their homes. It is offered to senior homeowners who are 62 years old and above, typically those who own their houses outright/have paid off their mortgage, or those who are close to paying it off. Unlike a regular mortgage, you won't be the one making payments to your lender. Instead, you will get payment from the lender. That's why it's called a reverse mortgage. Borrowers can opt to receive their payment from the lender as a lump sum or a monthly payment.

So, how is the loan going to be paid?

Here's another thing that makes this loan different. The mortgage policy doesn't require homeowners to sell their homes nor move out. They can continue living there—but there's a catch. The loan must be repaid when the borrowers die or when they move out or ...
... sell their properties. The payment will be collected from the proceeds of the sale of the home. In case the home is worth less than what is owed on loan, all money from the sale will be used to pay for the loan. Also, part of the rule is that homeowners are prohibited from leasing the properties. They must be the only ones occupying the house.

Does this mean you are no longer the owner of the property?

This is a common misconception about a reverse mortgage. Many people think that the lender becomes the owner of their property. This is not technically accurate. The lender only has legal rights over the property, as with any home loan. The lender has the first claim on the proceeds of the home when it is sold.

Why should you consider this type of loan?

Most of the people who opt for a reverse mortgage in Colorado Springs take advantage of the loan because they can use the money for their daily living expenses. After all, most qualified homeowners for this mortgage are already retired and don't have a steady income source. Others use them to pay for healthcare and home repair.

Elevation Mortgage, LLC is a mortgage broker and we serve loans in Colorado. Our focus is VA loan, FHA loans, Conventional loans and Reverse Loans. Our office is located in Colorado Springs, which is where the majority of our business comes from.