How Much Money Do You Really Get from a Reverse Mortgage?

What Is A Reverse Mortgage?

Reverse mortgages, also known as reverse equity loans, give you access to the amount of money that your property is worth.

It is termed a reverse mortgage because instead of paying the bank or any lender, they will be the one paying you, the property owner. Of course, you will need to have a property to serve as your collateral.

One benefit of getting this is that you don’t have to move out, which means that the property’s title is still yours. In addition, qualifying for a reverse mortgage is more accessible than a home credit loan.

Who Can Qualify For This?

A reverse mortgage is a loan given for those who are 62 years old and above, the retirement age for the majority of the working people.

Age is important because it is one of the bases of the lender in determining the amount of money and the interest to be given to you. Another requirement is that the house, serving as your collateral, is your primary residence.

How Much Money Do You Really Get from a Reverse Mortgage?

Reverse mortgages and their terms are based on age. If the primary borrower is married, the terms will be calculated based on the youngest spouse's age as long as they are age 62 or older.

If the home is paid off, the lender will typically offer an amount that is less than 80% of the home's equity. This reduction accounts for additional fees that the bank will add to the loan.

Ways To Receive The Money

The first one is to get it all at once, also known as the Lump Sum. This method has the only fixed interest rate among all the options. It also benefits you more for it offers more opportunities for the homeowner.

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