Reverse Mortgage For Elders

A reverse mortgage is also called as HECM or home/ house equity conversion mortgage. It is a special kind of loaning system for homes where the lone receiver does not have to pay monthly payments of mortgages. The loan borrowers still have the responsibility towards insurance and property tax. The monetary interest is added to the amount of loan balance every month as the home loan is not paid every month in installments. In most cases, the borrower does not have to pay any extra amount but has to pay for the true monetary value that the home has. The laws for reverse mortgages vary in different countries of the globe. Homeowners can defer paying for the loan until they sell the home, move out of it or die.

How reverse mortgage differs from regular mortgage
In the regular loan mortgage, homeowners make a monthly payment towards the home loan amount. The homeowner’s equity in the home increases by each monthly payment and adds to the equity sum or principal amount that he/she has invested in the home. The reverse mortgage scheme does not require a monthly payment. Still the final amount that the borrower has to pay does not exceed the value of the home itself. With each passing month, interest adds to the loan amount.

Eligibility for reverse mortgage loans
There are some eligibility criterion's that are laid by certain companies and regulatory authorities. According to these, a person must be over 60 or 65 years of age and must own property. Also, the existing present mortgage balance should be not high and must also be paid to the monthly, annual or other payment kinds of proceeds of reverse mortgage loans.

Drawbacks associated with reverse mortgage
Reverse mortgage loaning schemes are considered more complex and not every consumer can understand fully how does reverse mortgage works. When combined with misleading kinds of advertisements and poor quality of counseling, its unusability increases further. There are also inherent risks of scams and frauds. A reputed and trusted service like Its Still Your Home provides for flawless service and counseling.