A reverse mortgage allows homeowners who are at least 62 years old to pull some of the equity out of their home. They must live in the home at least six months out of every calendar year. Second homes and investment properties can’t be used to secure a reverse mortgage. Homeowners must realize that if they have to stay in a nursing home or rehabilitation center for more than six months in the same year, that can cancel the Reverse Mortgages Virginia Beach agreement. They are then required to pay back the money that they have borrowed, as well as the interest. The same thing can happen if they fail to keep up the insurance payments, stay current on their property taxes, or maintain the house in good condition. In essence the lender wants to ensure that when the time comes, the house and property will be in good condition.
Homeowners often believe that when they take out a reverse mortgage that they are giving up the title to their property. This is not true. They keep the house in their name. After the last person on the reverse mortgage no longer lives there, the amount that the bank lent plus interest comes due. The heirs of the property can pay that back to the bank and keep the house. If the heirs decide not to pay back the mortgage amount, the lender will sell the house. If the sale price is above the amount of the mortgage, then the estate will get the difference. However, if the sale price is below the amount owed, the estate owes nothing. The lender loses the money.
The Reverse Mortgage Pro Virginia Beach lender is betting that real estate values will rise during the life of the reverse mortgage. They consider how old the person is, the local real estate market and the condition of the house when deciding how large a reverse mortgage to grant. The homeowner can accept either a fixed or variable rate mortgage. They can receive monthly payments or a single lump-sum payment. Homeowners should hire their own independent financial adviser to help them select which plan is right for them.
