Reverse Mortgage Lenders

One excellent kind of mortgage financing available to older homeowners is a reverse mortgage.

In a reverse mortgage a person signs an agreement that states a lender will make them a monthly payment. In exchange for this payment the lender gets the right to take ownership of the home at the end of the mortgage or when the homeowner dies.

Reverse mortgages are only available to people who are over 62 years of age. They are designed to help older people with limited incomes stay in their homes and pay their bills.

How to Qualify for a Reverse Mortgage

A person will only be able to qualify for a reverse mortgage if they have no other mortgages or equity loans on their home. Reverse mortgage lenders have this requirement because a person needs to own their home free and clear to get a reverse mortgage.

This means that a person will have to pay off all of the mortgages on their home before getting a reverse mortgage. It maybe possible to work out a deal with a reverse mortgage lender in which the reverse mortgage lender pays off existing mortgages.

Drawbacks to Reverse Mortgages 

The biggest drawback to a reverse mortgage is that the person who gets one will no longer be able to sell their home. This means that those who have reverse mortgages will not be able to take advantage of increasing housing values.

Another drawback is that a person will not be able to take out another mortgage equity loan on a home with a reverse mortgage. This can greatly limit a person’s ability to borrow additional money for expenses such as repairs or home improvement.

Putting a reverse mortgage on your home also means that you won’t be able to leave it to your children or other heirs. At the end of the reverse mortgage the home will revert to the reverse mortgage lender which will be able to sell it off.

Locating Reverse Mortgage Lenders

The best way to find reverse mortgage lenders is to type the term reverse mortgage lenders into a search engine. This should produce a list of reverse mortgage lenders that operate in your area.

Shopping for a reverse mortgage lender is just like shopping for a regular mortgage. You go to the lender’s websites, get quotes and choose the one that offers the best deal. Once you’ve discovered a really good deal on a reverse mortgage you apply for it just like any other mortgage.

One advantage to a reverse mortgage is that your credit rating shouldn’t affect your ability to get a reverse mortgage. Reverse mortgage lenders are free to ignore credit ratings because reverse mortgages are secured by a deed on the property.