How Can a Senior Get a Reverse Mortgage Loan With Bad Credit? | |
The federal government has made the terms of the reverse mortgage loan as flexible as possible, so that most of the seniors age 62 or over could get this loan, if they want. One thing, which helps a lot is the compulsory mortgage insurance, which means that the lender will always get his money and that the borrower will never owe more than the equity of the home.
1. The Guarantee For The Reverse Mortgage Loan Is The Equity Of The Home.
It is usual, that seniors have lower incomes, than what they had, when they got monthly salaries. It is usual that during many years they have paid their mortgages, which have normally been good investments thanks to the price increases of the homes.
With the reverse mortgage loan the money goes in a reverse way. The lender will pay to a senior using the equity of the home. The important principle is, that the borrower does not pay anything back until the loan will be closed. This means better monthly incomes or if a senior takes the payment as a lump sum, more money for some bigger target.
2. You Will Never Owe More Than The Value Of Your Home.
When the guarantee of the reverse mortgage loan is the equity of the home, only that will be used to pay back the reverse loan. For surprises there is one extra guarantee, the compulsory mortgage insurance. These factors guarantee, that your other assets will never be used to pay the reverse mortgage loan.
3. The Benefits Of The Compulsory Insurance.
The truth that you can never owe more than the value of your home and that your other assets will never be used to pay the reverse mortgage loan is based on the compulsory mortgage insurance. This subprime loan crisis teached one thing, whatever can happen.
When the home prices dropped by the two digit numbers, so did the values of the guarantees of the reverse mortgage loans. And if a senior had to sell his home during those tough times and the home price did not cover the reverse loan, the difference was paid from the mortgage insurance.
4. Your Heirs Will Not Pay For Your Loans.
It would be unfair, if your heirs would inherit your debts. This will never happen with these loans. There are two things. First, the sales price of your home will be used to pay back all the costs of the reverse loan. If the sales price do not cover the whole sum, the missing sum will be paid from the compulsory mortgage.
As you see, the loan offers a fair opportunity to get more disposable monthly money or a lump sum, which a borrower can use for the need, he sees important. And he can get the loan even if he has a bad credit information.
Juhani Tontti, B.Sc., Marketing. Senior! Can You Get A Reverse Home Mortgage With Bad Credit? Yes, But Learn First, What Is Reverse Mortgage And Meet The Counselor. Visit: Reverse Mortgage Loan
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