It is important that you understand that reverse mortgages are loans. Ideally reverse mortgages target any home owner who is not only aged above 62 years but one who has a good home equity. In this cases such a home owner can be loaned money that is equivalent to the value of his or her home and then get the funds as fixed monthly payments or a lump sum amount. Unlike other mortgage loans this one will not compel you to make any payment. The loan balance is due only when the borrower dies. In most cases the financial institutions will structure the payment in such a way that your payment will not go beyond the value of your home. In the even the borrowers loaned money become more than what their home is worth then they will never be held responsible and the lender will have to suffer the loss. The purpose of this is to ensure that your interests as the borrower have been protected. As such the lenders are keen to check the factors that may lead to such a scenario like the value of homes in the area going down or the borrower living more than anticipated.
Therefore when a home owner takes a reverse mortgage he is not the one to pay the lender but it is the lender who will be paying the home owner. Also the homeowners are free to choose the mode of payment by the lender. To add to this the lender will not take the title of the home and it will remain with the home owner until the payment is due when he or she is dead. Mostly if the homeowners heirs decide to pay the mortgage loan the lenders cannot deny them the opportunity. When the mortgage is paid the heirs will b we allowed to keep the house after the death of the home owner.
It is good to also note that proceeds got from reverse mortgages are not taxed which is great advantage of taking a reverse mortgage. This coupled with the idea that no one will compel you to make loan payments every month make this type of mortgage an awesome for seniors who are not willing to make such commitments.
There are several types of reverse mortgages that are at your disposal. These options include term payment and a line of credit, fixed monthly payments, as well as a line of credit mortgage type. Due to the difference in their terms ,conditions benefits and even payments if it important for a home owner to study each of them carefully so that they choose the one that best suits his needs. Whichever the case a reverse mortgage will make your last days comfortable.