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Home Equity Loan
With a Reverse Mortgage, Your
Home Pays You!
The home equity loan has become quite popular
in the last five years, and Americans have tapped into the equity of their
homes in record numbers. The reasons vary, although home improvement and debt
consolidation are the most common reasons for borrowing against a home’s
equity.
In the last fifteen years or so, a new twist has arrived in the home equity
market –- the reverse mortgage. Like a traditional home equity loan or
line of credit, a reverse mortgage allows you to borrow against the equity in
your home. Unlike those other options, you don’t have to make payments in order
to pay it back. The repayment takes place when you die, when you move, or when
you sell your home. You must be at least 62 years of age to qualify, but unlike
other loans, you do not have to have any appreciable income in order to get a
reverse mortgage.
There are a number of advantages of a reverse mortgage over a traditional home
equity loan:
Your options of receiving the money from the loan include a
monthly payout, although you may also elect to receive a lump sum or a credit
line. A monthly payout would effectively provide you with a regular “income”
during the remainder of your time in your home.
The loan isn’t due until you move, sell the home, or die. There
is no repayment schedule, as with regular installment loans. At the time of
your death or when you sell the house, the loan must be repaid with interest.
The amount you have to repay cannot exceed
the value of your home. With this feature, you are protected should your home
decline in value. The lender cannot force you to pay more than the value of the
home.
Due to the age restrictions on reverse mortgages, they are not for everyone.
But if you qualify, it could provide an excellent opportunity to have an income
during your retirement years.
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing,
a firm devoted to informational Websites, including http://www.End-Your-Debt.com/
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