Everything you need to know about reverse mortgages

Cash-out refinancing helps you leverage your home equity into cash. Learn more about the pros and cons, and check current rates to see if it's right for you. Reverse mortgages decrease the amount of equity you have in your home.

The borrower maintains the title of the home and maintains responsibility for property taxes and homeowner’s insurance payments. If you are within 6 months from your next birthday, I will automatically calculate you a year older. A specialist will explain what a reverse mortgage is and take you through the application process.

It functions as a hybrid between a traditional forward mortgage and a reverse mortgage. A couple of decades ago, around 20% of americans over age 65 had a mortgage, but today that figure is over 40%. Consequently, it’s not surprising that paying off existing mortgage debt is one of the main motivating factors for many seniors in choosing to get a reverse mortgage. “there have been misperceptions about the way the product works — we all continually need to educate about these misperceptions,” irwin said. Among the more common misperceptions surrounding reverse mortgages is that the bank owns the title of the house or that they’re only loans of last resort.

However, most arvest bank reverse mortgages are owner-occupier loans only so that the borrower is not allowed to rent the property to a long-term tenant and move out. A borrower should check this if he thinks he wants to rent his property and move somewhere else. Be aware that since the home will likely need to be sold to pay back the reverse mortgage, these types of loans may not be a good option if you want to leave your home to your children. Be aware that if you choose to finance the costs associated with a reverse mortgage, they will increase your loan balance and accrue interest during the life of the loan. You and any other borrowers on the reverse mortgage must be at least 62 years of age. Some banks and financial institutions offer their own reverse mortgages.

For example, you might take a small lump sum upfront and keep a line of credit for later. You'll be required to keep up with your home's associated expenses. Foreclosure is possible if you find yourself in a position where can't keep up with property taxes and insurance.

This can expose the lender to risks even though the lender retains lien priority. The possible leave home options are short sales, mortgage release, and foreclosure. A short sale involves the sale of a home for less than the balance remaining on the mortgage in agreement with the mortgage company.