It is important that you understand that reverse mortgages are loans. If you are a home owner with a considerable home equity and aged above 62 years then you are eligible for a reverse mortgage. Here you will be allowed to borrow money of a value as that of your home and you will get funds in fixed monthly payments or lump sum. Contrary to other types of mortgage loans there is no law compelling you to make any payment of the loan. When you die that is when your entire loan becomes due for payment. To be safe most lenders will ensure that your payment is structured in a such a way that the payments you receive will not go beyond the value of your home. As such if your loaned amount exceeds the value of your house you will not be held responsible and it will loss on their side of the borrower. This is to ensure that the interest of the borrower is well taken care of. This makes it important for most lenders to assess factors that could lead to these possible losses like home values in the area going down or the borrower living for more years than the two parties had ever thought.
Therefore with reverse mortgages the loaners are not the ones who pay the loan rather it is the lenders who pay them. Furthermore the home owner has the freedom to decide how he or she the payments to be given to him or her. 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. All these have specific and unique advantages, terms and conditions and it is important that you consider each of them carefully before making a choice. However any of them will guarantee that your last days are full of comfort and o financial struggles.