How to Borrow Money with a Reverse Mortgage Loan for Seniors

A reverse mortgage loan for seniors is a way to borrow money against your home. For seniors who retirement income is not meeting their everyday needs a reverse mortgage may be a good choice. These loans do not have to be repaid until you sell or move out of your home. The reverse mortgage allows you to borrow money from the equity that you have in your home while at the same time you are allowed to stay living in your home. Because the high cost of these loans you should only get one if you plan to continue to live in your home for a number of years.

Difficulty: Moderate

Instructions

1. Check Your Options
   Before you apply for a reverse mortgage be sure to check all of your options. A simply home equity loan may be all that you need to get through rough times. Downsizing to a smaller home or moving to a senior community may be a better choice than staying in your own home. Get some financial counseling about the risks and pitfalls before signing up. If you definitely want to stay in your home and use your homes equity to cover your expenses than the reverse mortgage may be your best option.

2. Meet the Requirements
   You must be 62 or older to get a reverse mortgage. You will need to own a home and have adequate equity in your home. The younger that you are the more the loan will cost you over time.

3. Shop Around for the Best Price
   Yes it is necessary to contact more than one lender for your reverse mortgage. The difference in fees and interest can vary from lender to lender. Check out at least three different loan companies before deciding to sign up for a reverse mortgage. You can find online calculators to determine how much of a loan you are eligible to receive.

4. Decide on Your Payments
   You need to decide on how you want to take your loan payments. Your choices are lump sum, monthly, or periodic.

5. Talk This Over with Your Family Members
   When you move out of your house the loan has to be repaid. If you remain in your home you will still need to be responsible for maintenance and upkeep. It is important to involve your family members who may come up with a better solution for you.

6. Locate Mortgage Brokers or Lending Institutions
   There are several government programs set up to help you with your loans. The National Reserve Mortgage Lenders Association publishes a list of lenders by state. The Department of Housing and Urban Development publishes a list of HUD lenders. Check out these two sites to find reputable mortgage lenders.

Tips & Warnings

• Understand that these loans are costly and you need to stay in your home several years to make it worthwhile.
• Be sure to do your homework carefully before applying for a reverse mortgage.

Resources

• More Senior Living Articles by Sharon Meier

[pennynickols]

on 10/13/2009 Thanks for writing, "How to Borrow Money with a Reverse Mortgage Loan for Seniors." Your emphasis on how costly these loans are is very important and appreciated.