Seniors Should Consider the Option of Purchasing a Home with a Reverse Mortgage

Homeowners who are 62 or older, either own their home entirely, or who have a mortgage balance that can be canceled at closing with the money they will receive through the reverse mortgage, and who are going to live in the home are eligible for a reverse mortgage option. Additionally, the home must be 1-4 units, with one unit being occupied by the borrower. Other properties that may qualify for reverse mortgages are manufactured homes and condominiums which are approved by HUD and fulfill FHA requirements.

There are many reverse mortgages being offered on the market, but one of the first that was offered was the Home Equity Conversion Mortgage or HECM through the FHA. What a reverse mortgage does is that it allows senior citizens to supplement their income and perhaps pay medical, any portion of a mortgage they may have, or other bills. Reverse mortgages are seen as a safe alternative for seniors to have greater security and financial flexibility.

Through a reverse mortgage, you can convert part of the equity you already have in your home into money in your pocket. It is very likely that you have been making mortgage payments for quite a while if you are a senior, and this will have built up equity. Through a reverse mortgage option you can receive some of this equity in the form of payments or even a lump sum.

Even though a reverse mortgage is a type of loan, you will not have to make payments as long as you make the home your primary residence. If you take out a traditional second mortgage or home equity loan, you have to have a sufficient income-to-debt ratio to qualify for the loan, and you are still going to have to make monthly payments during the life of the loan. The reverse mortgage option will actually put money in your pocket, and it will give you the peace of mind that you will not have to make any more mortgage payments.

You will be limited as to how much you can actually borrow by your age, interest rates in the current market, home's appraisal value, plus any mortgage limits the FHA may have in your area, whichever is the least amount in the case of an HECM. However, if you foresee imminent or future financial difficulties, a reverse mortgage will not allow your house to be foreclosed upon, and you cannot be forcibly removed from your home.

There are other payments that you must make of course, such as your insurance, taxes, utilities and such, but you will eliminate that major payment that you have to make at the end of every month through your mortgage. There is plenty of information readily available online about reverse mortgages, but do not go to anyone that requires a fee to put you in touch with reverse mortgage lenders. You can find all of the information you need at the FHA website, or you can also go to the AARP website, and there is no charge for the information provided there.

And take a look at Retirement Property in Arizona, Retirement Property in Gold Canyon and Retirement Property in Surprise for great properties in Arizona.