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If you are an older, retired homeowner interested in paying off your existing mortgage as well as obtaining some additional income, there is a unique loan opportunity available. A reverse mortgage allows senior citizens an option to borrow funds while they use their home as loan collateral. If you are interested in learning more about your home loan options in Palm Beach, Tri-County, or Broward County, Florida, CTC Mortgage can assist you. Continue reading to get answers to the most frequently asked questions about reverse mortgages.

What Is A Reverse Mortgage And How Do I Qualify?

A reverse mortgage is a loan option available to borrowers who are of the age of 62 years or older, that allows them to exchange a portion of their home equity for either cash or a credit line as long as they occupy the property as their primary residence. Essentially, a reverse mortgage takes from your home equity and converts that into payments to you, therefore, instead of a borrower making payments to the lender like a traditional loan, the lender pays the borrower.

How Do I Receive The Funds From A Reverse Mortgage?

A borrower has a few options when it comes to receiving the payments from a reverse mortgage. They can receive the funds as one lump sum, they can receive it in monthly increments, they can receive funds as a line of credit, or they can opt for a combination of these options. A borrower can then use the reverse mortgage payments for any financial reason they want, there are no restrictions on what they can be used for.

When Does A Reverse Mortgage Need To Be Paid Back?

A reverse mortgage will be required to be paid back when the borrower no longer occupies the home for more than twelve months, when they sell the property, or if they do not pay for homeowners insurance and property taxes. In the event that the borrower passes away, the loan also becomes due, and the home must either be refinanced or sold by the estate’s heirs.

What Are The Benefits And Drawbacks Of A Reverse Mortgage?

There are several benefits to obtaining a reverse mortgage, for instance, there are no required monthly mortgage payments, instead, the borrower receives the payments. They can receive the funds in a variety of ways and use the money for any financial reason, whether it’s to make a purchase, pay off debt, medical expenses, remodel the home, etc. It’s also important to note, however, that some potential drawbacks are that homeowners insurance and closing costs will be required and this type of loan uses up your home equity.

If you are interested in learning if a reverse mortgage is right for you in the areas of Palm Beach, Tri-County, or Broward County, Florida, contact CTC Mortgage today for a consultation.

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