Foreclosure Strategies
May 10 2018
The best way to deal with a foreclosure is to take aggressive legal action when the foreclosure laws... [Read More...]
April 20, 2023 By
A reverse mortgage is available to individuals who are 62 years of age and older. The way the reverse mortgage works is no repayments need to be made until the homeowners die or the home is sold. When the homeowners die, their beneficiaries have up to a year to refinance the home, buy it or sell the house. If the home is sold and the proceeds from the sale are greater than what is owed on the mortgage, the heirs of the decedent keep the balance of the proceeds in excess of what is owed.
Seniors who take out reverse mortgage do not have to make mortgage loan payments during the rest of their lives. However, they have to pay for real estate taxes on the house, insurance on the house and they must maintain the premises in a good condition.
There are three different ways a homeowner can receive funds from the reverse mortgage. The first is in a lump sum payment. The second is a line of credit which they can draw on whenever they need money to pay bills. The third is called the stream of income. Set amount of payments on a monthly basis are sent to the homeowner. When a reverse mortgage is taken out, if there is an existing mortgage on the property, the funds from the reverse mortgage must first be used to pay off the existing mortgage, and then the balance of the funds becomes usable money for the homeowners as part of the reverse mortgage.
Families who have homes with significant equity in them can take out a reverse mortgage and use the equity to subsidize their lifestyle or to provide a cushion which can help them deal with unexpected expenses.
A reverse mortgage foreclosure can be brought by the financial institution if the homeowner doesn’t pay the taxes on the house, maintain the premises or pay the insurance on the house. In addition, the financial institution, if they are not paid off within a year of the homeowner’s death, can initiate a foreclosure lawsuit.