HUD reverse mortgages are something that has taken the nation by storm. They are, however, sometimes confusing and fraught with misunderstandings and negative connotations. They are an easy way for senior citizens to obtain some extra cash without worrying about repayment or further mortgage payments.
A reverse mortgage is a government program designed for homeowners who are sixty-two or older. It provides them with a way to take a loan out on the equity they have built up in their home. One of the most common misconceptions is that the bank will own the home. The loan is not due back until the last survivor leaves the home, and even then, it is up to the person to either sell the home or pay off the loan. There can be no debt incurred by any party, as a reverse mortgage has a special clause that states the loan cannot be held for more than the home would fairly sell for. This means that, were the home to sell for less than the reverse mortgage, the government takes the loss.
Perhaps the best thing about reverse mortgages is that there are no income or credit checks or restrictions. Since the homeowner is not expected to pay back the loan, their credit and income do not matter! In addition, the IRS does not count any money received from one of these as income, therefore there are no taxes owed on it, and it does not affect social security, disability, or any other monthly payout.
Though reverse mortgages are not for everyone, they can be extremely helpful to seniors who are in need, or even simply want to have a little extra cash on hand. If you are considering a reverse mortgage, check out this website: www.reverse-mortgage.org. It will answer a lot of your questions, and allows you to ask an agent anything that isn’t found in its information-packed pages.