The following is a list of the top questions about reverse mortgages drawn by reverse mortgage experts:
What’s a reverse mortgage?
Reverse mortgages are special types of home loans which allow users to convert a part of their home equity to cash. The equity that one built over years of making mortgage payments may now be paid to you. But, unlike traditional home equity loans or second mortgages, HECM borrowers don’t need to pay back the home equity conversion mortgage loan until borrowers no longer utilize the house as their main residence or do not meet all of the obligations of their mortgage.
How to receive payments
For an adjustable interest rate mortgage, it’s possible to choose one of the below plans of payment:
• Tenure: equal month-to-month payments so long as at the minimum of one borrower resides and continues to reside in the home as the main residence.
• Term: equal month-to-month payments for a fixed time period of months chosen.
• The line of Credit: in installments or unscheduled payments, during times and within an amount of your selection until the line of credit becomes exhausted.
• Modified Tenure: mixture of scheduled monthly payments and line of credit for as long as you stay in the house.
• Modified Term: mixture of the line of credit in addition to month-to-month payments for a fixed time period of months chosen by a borrower.
• Fixed interest rate mortgages, you’ll get Single Disbursement Lump-Sum payment program.
• Single-disbursement lump-sum: one lump-sum disbursement at the closing of the mortgage.
What if my mind is changed and I no longer desire the loan after closing? How will I do this?
According to the law, you’ll have 3 calendar days to change and cancel your loan. It’s referred to as a 3-day right of rescission. The cancellation process of the loan must be explained during the closing of the loan. Make certain that you ask your lender for directions about this process. All mortgage lenders differ in the loan cancellation process. You must ask for the names of the right people, fax numbers, phone numbers, addresses, or written directions on whatever procedure the business has in place. Within most instances, the right of rescission won’t be applicable to home equity conversion mortgage for purchase transactions.