How does the reverse mortgage loan work?On August 28, 2019 by John Albarran
No matter age, knowing how the invert mortgage works is very important. Usually do not wait until you are more than 62 to study the possibility of transforming the capital that represents a house into money or a month-to-month income.
Home loan and the reverse mortgage
There is a difference between the home loan and the reverse mortgage plus there is no need to return the money whilst staying at home. However , there are other factors that must be taken into account.
What aspects influence how the reverse mortgage functions?
There are 3 aspects that are taken into account for the invert mortgage:
- Age: Those people with retirement who do not have a monthly pension but who own a house may have a monthly salary.
- Available options: This person more than 62 years of age can choose a life pension or a fixed-term pension (for example, fifteen years),
- The particular heirs can choose to pay the particular loan once the property owner passes away.
Put simply, you can have a monthly earnings while you live. And if you choose a pension you can remain in the house after that time because of the provisions of the law upon foreclosure only in case of dying.
The law that will came into force to regulate this kind of mortgage states that the home will be executed only when the master dies.
What is going to happen to the heirs?
The law also provides for the lending company to consult the heirs if they want the preservation of the estate and if so that they must pay the mortgage.
Depending on the way the reverse mortgage works, it may be said that for the homeowner this solves the problem of insufficient pension, although for their heirs it may mean the particular contraction of a debt.