Benefits of Reverse Mortgage for Senior Citizens

World Senior Citizens Day 2019: The reverse mortgage industry has been plagued over the years by confusion, rife with reports of predatory lenders preying on the elderly. Today, reputable lending institutions require that borrowers receive counseling about the risks and pitfalls before committing to a reverse mortgage. Unfortunately, that still doesn't guarantee a homeowner won't get ripped off.



How a Reverse Mortgage Works
Reverse mortgages allow a homeowner to borrow equity. Instead of making payments to the lender, the lender makes payments to the borrower. Payments can be made as follows:



1. A lump sum
2. Monthly, for as long as the borrower occupies the home
3. Periodic advances through a line of credit
4. Combination of any of the above



Who Can Qualify for a Reverse Mortgage?
Anybody over the age of 62 who owns a home can qualify for a reverse mortgage if there is adequate equity in the home. That's the kicker, having enough equity to get the mortgage, as usually, a 20% equity position is insufficient. If there is enough equity, what happens next?



1. Existing mortgage(s) will be paid off.
2. Deferred maintenance/repairs will be required, if necessary.
3. FICO scores do not apply and credit history is irrelevant.



World Senior Citizens Day