A reverse mortgage loan is a type of mortgage product that is typically used by senior citizens who have reached the age of retirement. A reverse mortgage loan allows a person to receive either a lump sum payment or monthly payment taken from the amount of equity that their home has. A reverse mortgage loan can be a good choice for senior citizens who have equity in their home but low retirement savings, as well as those who may want to wait a couple of years to apply for Social Security retirement benefits in order to maximize the monthly payments that they receive. If you are interested in a reverse mortgage loan, take the following steps.
One of the best things about a reverse mortgage loan is the fact that you will not have to make any monthly payments on the loan. A reverse mortgage loan does not have to be repaid until the home is sold. Essentially, you can use your reverse mortgage to supplement or even fund part of your retirement without having to worry about making any type of monthly payment. However, reverse mortgage loans are not free—you still need to do your due diligence and research your options before deciding what lender to work with. Like any other loan, there are fees and interest involved in a reverse mortgage, so it is very important to choose a lender that offers the best terms.
Attend Reverse Mortgage Counseling
Before you can apply for and take out a reverse mortgage loan, you will probably need to go through reverse mortgage counseling. This is required to ensure that senior citizens at retirement age understand exactly what a reverse mortgage entails and to help ensure that no one falls victim to any type of reverse mortgage loan scam. Reverse mortgage loan counseling will answer all of your questions so you will know for sure that a reverse mortgage loan is the best option for your situation.
If you're interested in a reverse mortgage loan, you will need to apply for one with your preferred lender. Similar to a conventional mortgage, this will involve submitting a lot of paperwork. You will also be required to submit proof that you have completed reverse mortgage loan counseling. After your loan has gone through underwriting and been approved, you will need to sign loan documents. Shortly after, you will receive either a lump payment or your first monthly payment for your reverse mortgage loan.
For more information on reverse mortgage loans, contact a lender near you.