Reverse Mortgage Facts Laws

A reverse mortgage is primarily only available for senior citizens or individuals who meet the age of retirement eligibility. It is important to know reverse mortgage laws before deciding to enter into a reverse mortgage contract. There are many resources available to assist you in deciding if a reverse mortgage is right for you. Specific laws regarding the execution of reverse mortgages have been written to protect the consumer.

As you research the many options available to you, it is highly recommended that you enlist the help of a reverse mortgage specialist. These qualified individuals are trained to know the many variations of the reverse mortgage and can recommend a product that is just right for your specific situation.

There are many pre existing factors which may weigh in on the validity and legality of your reverse mortgage. Some of these factors include you financial state, solubility, solvency, evaluation of assets, and the condition of your property.

The reverse mortgage loan limits were raised in 2009 as an economic stimulus measure and are now fixed at $625,500. As the economic climate improves and the economy rebounds, it is very likely that the limit may again return to the pre-recession figure of $417,000. Typically, higher home values will allow the reverse mortgage borrowers to borrow more since the loan amount is determined by how much equity a homeowner has in the home. It is important to know the trends in the housing market before entering into a reverse mortgage as your loan value is directly affected by trends in the housing market.

Remember, it is your job to collect all the facts concerning your mortgage and to familiarize yourself with any and all applicable laws that apply. Just a little research can go a long way in helping you find just the right mortgage product to make your golden years as financially stable as possible.

Frequently Asked Questions About Reverse Mortgage And How Does It Works?


It is important to ask many questions when considering a reverse mortgage. The most frequently asked questions about reverse mortgage facts are about eligibility. However, there are many other topics that grab the concern of homeowners.


What is a reverse mortgage?


A reverse mortgage is considered to be a special type of home loan that allows you to convert the equity that you have built up in your home over the years into cash. The equity that you have built up over years of making mortgage payments can be paid back to you, over time. The main difference between a traditional home equity loan or a second mortgage and a reverse mortgage is that the borrower does not have to repay the loan until they no longer use the home as their primary residence or if they fail to meet the obligations of the loan itself.

2. What types of homes are eligible?

There are only certain types of homes that meet eligibility requirements for reverse mortgage lending. To be eligible, a home must be a single family home or at most a 2-4 unit home where at least one of the units is occupied by the borrower. Certain approved condominiums and manufactured homes are also eligible.

3. What are the differences between a reverse mortgage and a home equity loan?

There are many distinct differences between a home equity loan and a reverse mortgage. Most notably, a home equity loan relies on adequate income to finance the loan. A reverse mortgage is different because instead of the homeowner making payments, they become the payee. There are no monthly payments for principal or interest. The homeowner, or borrower, is only obligated to pay property tax, utilities, and insurance premiums.

4. How do I receive my payments?

Usually, there are five different payment options that are available to you, the borrower.
● Tenure- equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
● Term- equal monthly payments for a fixed period of months selected.
● Line of Credit- unscheduled payments or in installments, at times and in an amount of your choosing until the line of credit is exhausted.
● Modified Tenure- combination of line of credit and scheduled monthly payments for as long as you remain in the home.
● Modified Term- combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.

Reverse Mortgage Information
Reverse Mortgages or Mortgage Reverse like any other type of loan on the market,  is a financial instrument. Instruments like this have its own advantages as well as disadvantages. Here are some of reverse mortgage information on the pros & cons.


One of the pros of the mortgage reverse loan is that the applicant is not required to have any income at the time he or she is making the application. This is probably the reason why it is so popular among people senior citizens who have retired and do not have any alternative source of income. The other advantage is that it is not possible to borrow beyond the real value of the home. This is even if the lending company has paid out a cash amount that exceeds the property’s value at the time of sale.


On the other hand, there are also several disadvantages that come with mortgage reverse. The first one of this is in the closing costs. In fact, these costs can be twice as high as the amount on the same costs of conventional mortgages. The other disadvantage is the fact that the loan will mature when you are no longer residing in that house. During this time, your next of kin will be compelled to sell the house in order to repay whatever amount will have been paid out.

Reverse Mortgage

Reverse Mortgage Experts and Information


Since you are now aware that the process for applying for these loans is a bit complicated, please allow our reverse mortgage experts help guide you through the process. The rule of thumb is to check whether the pros outweigh the cons. Feel free to give us a call and discuss the possibility of receiving income from a reverse mortgage.


Many financial lending institutions or banks offer loans to their clients having a plan of how the loan is to be paid. One of the most common plans is that which requires the borrower to pay a part of the loan every month, throughout the loan term. Besides the common monthly payments’ loans, financial lenders are now offering reverse mortgage. The mortgage reverse definition  is an agreement between the lender and homeowner, who is 62 years or more to convert the home equity into money.


This type of loan is paid after an occurrence of certain events and therefore, not fixed to a certain period. The events that can trigger the payment of a reverse mortgage include a sale of the property, death of the borrower, violation of certain contract clauses and moving out of the property.

Information on Reverse Mortgages

There are certain conditions that you must meet to qualify for this type of a loan. First, you must be above the age of 60 years. The amount to be given tends to increase with the age of the borrower. Secondly, you must establish the loan to valuation ratio. This is the percentage of the first amount entitled to a borrower against the price of the mortgage property. This will help the lenders to set the highest amount of the loan.


In addition, he or she must pay the outstanding amount to qualify for this type of a loan. These are some of the basic requirements that the applicant must fulfill. Thirdly, the property offered as a Reverse Mortgage Disadvantages, should be the applicants own property.

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