Mafi-Hollandia

Age doesn’t prevent the elderly from applying for loans. People who are aged 62 or more can actually apply for a home loan through a reverse mortgage. Known as lifetime mortgage in other parts of the world, a reverse mortgage is a kind of loan available only to seniors. This loan is used to release the property’s home equity either as one lump sum or payments through installment. The repayment obligation is deferred until the home is sold, the owner leaves (for care homes) or if the owner dies. This type of mortgage is equivalent to an annuity in which the principal and interest are paid with the homeowner’s equity, so it’s not something that should be considered until you have all the reverse mortgage information needed.

Conventional mortgages would require the homeowner to make a monthly amortized payment to the lender. The property equity increases after each payment. Depending on the duration of the term, the mortgage is supposed to be paid in full after the term. The property is then released from the lender after which the homeowner will then have full ownership of the property. In a reverse mortgages, on the other hand, no payment shall be made. The interest will be added to the lien of the property. Lien, in legal parlance, is actually a sort of security interest which is granted over an item or property. This is important so that a lender or an owner of a property will have security in receiving the payment of a debt or other obligation.

reverse mortgage loan

This entry was posted on Wednesday, December 3rd, 2008 at 10:46 pm and is filed under Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.