A reverse mortgage is a type of loan that allows the home owner to get some money without having to sell their home. A reverse mortgage is secured by the equity in the home, but it must be the portion of the equity that is debt free. It’s designed for homeowners 55 years of age and older. If one homeowner has a spouse, both must meet the age qualification otherwise the loan will not be qualified by the lender.
Not all lenders offer reverse mortgages. You will also need to qualify for a reverse mortgage. In order to determine whether you qualify for a reverse mortgage, a lender will look at the equity you have in your home along with some other criteria like the appraised value of your home, the current interest rates, where you live, and of course will take your age into consideration. Normally the older you are, the larger the loan a lender will approve.
The loan amount on a reverse mortgage can be up to 50 percent of the current value of your home. But if you have any outstanding loans secured with your home, you must pay them off with the funds you receive from the reverse mortgage. Sitting down with a good mortgage broker can help you understand a reverse mortgage and what your options may be before going ahead with a reverse mortgage.
For more information on financing or if you need a mortgage broker, contact Tracey Brock of Dominion Lending Centres.
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