Do you know who owns the house on a reverse mortgage?
You’ve probably heard the commercials promising a comfortable retirement, but do you know whether they’re right for you or your family?
There’s a lot of misinformation out there about reverse mortgages. This article gives you a basic understanding of reverse mortgages so you can know when to seek one.
Let’s get started!
What Is a Reverse Mortgage?
A reverse mortgage is a loan product made specifically for seniors. It allows them to access the equity they have in their home as loan funds. The borrower remains obligated on their loan balance and retains house ownership.
Because of this, the borrower remains responsible for property taxes, homeowners insurance, and maintenance. The lender will become the lienholder on the title and have the right to foreclose if the borrower does not meet their loan obligations.
The lender is entitled to the proceeds from the home’s sale when obligations have not been satisfied.
Who Is Eligible?
This home loan enables homeowners to access the equity in their homes without selling or moving. The homeowner who is 62 years or older and lives in a single-family home, a 2-4 unit home, or a condominium, townhome, or manufactured home can be considered eligible for a reverse mortgage.
Eligibility is also determined by various other factors such as home value, borrower’s reverse mortgage age, available loan programs, and property type. Once eligible, the home’s owner is still the house owner while utilizing a reverse mortgage purchase.
The lender will provide funds to help with expenses but will have a lien on the house. The owner maintains ownership of the house and has the right to live in it as their primary residence.
The house is sold upon the owner’s death or when the owner no longer lives in the home as their primary residence.
How to Find the Best Reverse Mortgage
In a reverse mortgage, the homeowner still owns the home and retains the title. However, they must make scheduled loan payments to the lender until they fully repay the loan.
The lender’s lien is secured as a claim to the property, and the loan will need to be paid off when the homeowners no longer occupy the home. To ensure you get the best terms and conditions on your reverse mortgage, it is essential to understand the ownership implications clearly.
To learn more about it, check out this reverse mortgage loan found here.
Who Owns the House on a Reverse Mortgage?
The reverse mortgage is an excellent financial planning tool for senior homeowners who wish to remain in their homes.
Who owns the house on a reverse mortgage? The homeowner retains ownership of the home, as the lender is only granted a lien on the home as collateral for loan repayment.
If this is the perfect solution for you or your elderly parents, contact a reverse mortgage specialist today!
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