Different types of reverse mortgages have certain similarities. These are their common features. Homeownership In a reverse mortgage, you are the still the owner of the house. Payment of property taxes and home-owner insurance and arranging repairs on the property is still your responsibility. Repayment of cash advances and interest should be done when the loan is over. Financing Fees The reverse mortgage can be used as payment for loan charges. It is added to the loan balance and used for repayment when the loan is finished. Loan Amounts The plan or program you select as well as the kind of cash advance determines the amount of money you can get. Other reverse mortgages are costlier than others, and this can reduce the amount you can obtain. Your age and home value determines the amount you can get in each loan program: The older the age, the more cash will be obtained The higher the home value, the more cash you can get. The interest rates and closing costs can also determine the specific dollar amount. Debt Payoff The borrower can have the option to repay any home debt with a lump sum advance from the reverse mortgage. When the lender concurs to the repayment of the reverse mortgage, other debts against the home need not be paid off. Debt Limit The debt owed on a reverse mortgage is the sum of all the loan advances and added interest to the loan balance. When the worth of the home value when repaying the loan is less than the debt computed, that amount will be kept by the owner. Repayment When the remaining borrower dies, sells the home or permanently leaves the home, all reverse mortgages become due and payable. Repayment of the mortgage is required any time if there is: Failure to pay property taxes; Failure to maintain and repair home; or Failure to maintain home insurance. On a reverse mortgage, lenders generally have the choice to pay for these expenses through loan advance reduction and using the difference as payment obligations. This is only an option when the available loan funds have not been used up yet. All the conditions of the loan documents must be read and understood which may cause the loan to become due. Cancellation Upon closing of the reverse mortgage, a borrower is given three days to reconsider your decision. The loan can be canceled when you decide you do not need it. It should be done within three business days after closing. Cancelation must be done in black or white through fax, letter or telegram. It must be delivered by hand, sent by mail, fax or through a telegraph company before the stroke of midnight of the third business day. Telephone or face-to-face cancelation is not allowed. |
