What Should You Know about a Reverse Mortgage for Senior Citizens
by Mary Ann
You see a lot of commercials on TV today about the benefits of reverse mortgage for senior citizens. In fact, my aunt and uncle are seriously considering it, but I encouraged them to do their homework and research both the pros and the cons of a reverse mortgage.
I was worried, despite the fact that it all sounded great on the television commercial. Is there a catch, or a down side to the process? I talked to a friend of mine who is a mortgage broker and asked about more details regarding the basic facts of reverse mortgages.
I found out that you have to be at least 62 years old to even qualify for a reverse mortgage, and that the owner/s is required to live in the residence a majority of the time. Most single-family or one unit dwellings are eligible, but mobile homes typically are not.
One of the benefits of a reverse mortgage is that you don't have to repay the loan right away. However, as I told my aunt and uncle, the loan does have to be fully repaid (and that includes interest as well as additional charges), if the owners sell the home, permanently moves away, or when one of the last living borrowers dies.
I also found out that because monthly payments are not required, the amount you owe can grow larger over time, reducing the equity in the home to smaller and smaller amounts.
The bottom line is that yes, reverse mortgage for senior citizens does provide some benefits, but you also have to be aware of the down side.