Senior home owners can solve their debt problems with a reverse mortgage
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Are you a home owner aged 62 years or more? If so, you can get an income or a lump sum, or even both, by using the equity in your home.
Even if you don’t own 100% of your home, so long as the outstanding amount is low you can still use a reverse mortgage as a source of funds. You will need to use some of the money to pay off your mortgage, but that should reduce your outgoings in any case. And you don’t have to undergo credit checking, as this is not a requirement.
A reverse mortgage is like a regular mortgage in many ways, but the difference is that instead of having to make a payment every month, the lender pays you! You won’t have to pay anything until you move home.
Reverse mortgages have to comply with strict Government regulations, making them one of the safer ways to raise money. Both the fees and the redemption price are regulated, and the value of your home at the time of redemption, you can’t be made to pay back more than the home is worth.
To qualify for an HECM mortgage you must be 62 years of age or older, and you must attend HECM counselling – this is a Government regulation and is designed to protect you. After the reverse mortgage is agreed, you must ensure all necessary maintenance is carried out, or you will be in breach of contract.
You can receive money as a line of credit against which you can draw at will up to the agreed maximum or a monthly income, or a combination of the two, which is the option you would probably go for if you need to pay off debt. The amount of the line of credit is fixed and cannot be reduced by the lender, unlike similar products which are not Government-regulated.
To find out more about how reverse mortgages work, visit MortgageReverse