Reverse Mortgage Basics: It's A Mortgage
It's always good to go back to the beginning and make sure we got the basics down. As reverse mortgages continue to evolve in how they are advertised by various companies as well as how they are used by consumers, one can get muddled and lose sight on the basics of the program.
So, let's not forget that a reverse mortgage is simply a mortgage. In other words, a lien against the home. The difference with this mortgage is that it offers flexible payment options. There is no requirement to make a monthly mortgage payment, so a borrower can choose each month whether he or she wants to make no payment or a payment for any amount they wish. Most borrowers elect not to make a payment each month. However, some may want to make an interest only or a principal & interest payment to keep the loan balance from increasing over time. The point here is that a reverse mortgage gives you more choices and greater control over your cash flow each month.
With a reverse mortgage there is not a specific loan maturity date. Unlike other mortgages which have common loan terms of either 15 or 30 years, a reverse mortgage is in place for as long as the homeowner is living in the home as their primary residence. That loan period can end up being for any amount of length of time as long as they meet the primary residence requirement and continue to make their property charges (i.e. taxes, insurance, HOA (if applicable) and general maintenance) on time.
Check back for more reverse mortgage basics topics.
So, let's not forget that a reverse mortgage is simply a mortgage. In other words, a lien against the home. The difference with this mortgage is that it offers flexible payment options. There is no requirement to make a monthly mortgage payment, so a borrower can choose each month whether he or she wants to make no payment or a payment for any amount they wish. Most borrowers elect not to make a payment each month. However, some may want to make an interest only or a principal & interest payment to keep the loan balance from increasing over time. The point here is that a reverse mortgage gives you more choices and greater control over your cash flow each month.
With a reverse mortgage there is not a specific loan maturity date. Unlike other mortgages which have common loan terms of either 15 or 30 years, a reverse mortgage is in place for as long as the homeowner is living in the home as their primary residence. That loan period can end up being for any amount of length of time as long as they meet the primary residence requirement and continue to make their property charges (i.e. taxes, insurance, HOA (if applicable) and general maintenance) on time.
Check back for more reverse mortgage basics topics.
For more information on reverse mortgages and other related topics contact:
Certified Reverse Mortgage Professional (CRMP)
NMLS# 473353
Toll Free (877) 500-0454
Local (702) 460-6222
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