Saturday, December 29, 2012

What are the Requirements of Reverse Mortgage?

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Reverse mortgage has become an easy financial tool for seniors who want to secure their retirement. All seniors may not qualify to get this type of financial help because there are some requirements that the borrower has to fulfill to get this loan. If you want to qualify for this type of loan you should be 62 years of age and should have a home of your own. Most people qualify these conditions but some do not because they have a property of lower value.

In reverse mortgage the borrower does not have to pay the loan till living in the same house or dies. If there is a case of pending bankruptcy against the borrower it will not stop from getting this loan. But it will slow down the process to some extent. You should assess the amount of equity in your house to get a reverse mortgage. The amount of equity on which your loan depends includes the funds that will be used for the payment of the loan in future and lender is sure of getting the returns when the loan is to be closed by the borrower.

The amount of loan is determined by many other factors. Federal housing administration is one such agency that plays an important part in this type of loan. This agency verifies the age, location and appraised value of the home for sanctioning the loan to the borrower. When you plan to get this loan it is important that you should contact the right agencies so that you may not be hacked by the scammers. The lender that you select for getting a loan should be reliable and known to you so that you may trust him/her before applying for the loan.

Some lenders cheat people by applying high rates of interest and other additional fee that is given by the borrower. Therefore, you should be careful while selecting the lender so that you may get complete information about this procedure and who may also help you to understand all the benefits and drawbacks of this procedure.

Before applying for this type of loan you should visit a counselor who is certified by the government to give a counselor certificate. Counseling is done to help people understand all the steps that are included in this type of loan procedure. The main duty of the counselor is to explain about the benefits and disadvantages of the reverse mortgage and also to tell people if they are eligible to get this loan or not.

On the basis of counseling senior couple can make the decision if they are really in need of this type of loan or not. They can know if it will be beneficial for them or not. Counseling is an effective step and you should go to a counselor who is approved by the Department of Housing and Urban Development (HUD).

Seniors should carefully look at the requirements of this loan and should find out each and every formality that is required to be completed before getting loan. It is important that they should do extensive search over the internet about this loan procedure. This search will help you to make the right decision for your future. It is worth spending time on this research to get best results.

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