I’ve been meaning to write about the Reverse Mortgage on here for some time now.

Reverse mortgage loans in Wisconsin

The Reverse Mortgage was created for Seniors that need access to the equity in their home.  The senior needs to be 62 years old or older and have a decent amount of equity in their home they occupy.  Typically, you need about 30% equity in your home in order to qualify.  It’s very difficult to say exactly the amount of equity needed, because the approval is based on the age of the senior and location of the property.

Here are the best things about the Reverse Mortgage:

  1. You never have to make a payment as long as you occupy the home.  Yes, you NEVER HAVE TO MAKE A PAYMENT!
  2. There are no credit score requirements.  It can help seniors that are facing foreclosures.
  3. The senior has options as to how they want to access the equity in their home:
  • A line of credit – The senior receives a “check book” and is allowed to write out checks when needed, up to the line amount that is approved.  Whether it’s for home improvements, to pay for the property taxes, or pay for any other expenses it doesn’t matter.  Most times the senior will write themselves a check in order to help with some bills that month if they are short on income.
  • A lump sum- The senior can receive a portion of funds at closing or the entire amount of funds that the line is approved for.  Say the line is approved at $20,000, but the senior needs $10,000 to do some much needed home improvements.  Well, the senior’s line will still be available for another $10,000 after closing.  It still acts like the line of credit.

Here is the worst part about the Reverse Mortgage:

The Reverse Mortgage is not the cheapest mortgage loan.  The costs can vary from $6000 – $10,000.  The senior does not have to come out of pocket with this money, it will already be deducted from the available funds.

Also, if there are anyother liens like tax liens or judgements on title, these will have to be paid off through the loan.  Most times, the senior will have enough equity in the home to pay these other liens off as well.

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