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Home Equity Loan – With A Reverse Mortgage, Your Home Pays You!
By: Charles Essmeier
The home equity loan has become quite popular in the last five years, and
Americans have tapped into the equity of their homes in record numbers. The
reasons vary, although home improvement and debt and debt consolidation are the
most common reasons for borrowing against a home’s equity.
In the last fifteen years or so, a new twist has arrived in the home equity
market –- the reverse mortgage. Like a traditional home equity loan or line of
credit, a reverse mortgage allows you to borrow against the equity in your home.
Unlike those other options, you don’t have to make payments in order to pay it
back. The repayment takes place when you die, when you move, or when you sell
your home. You must be at least 62 years of age to qualify, but unlike other
loans, you do not have to have any appreciable income in order to get a reverse
mortgage.
There are a number of advantages of a reverse mortgage over a traditional home
equity loan:
# Your options of receiving the money from the loan include a monthly payout,
although you may also elect to receive a lump sum or a credit line. A monthly
payout would effectively provide you with a regular “income” during the
remainder of your time in your home.
# The loan isn’t due until you move, sell the home, or die. There is no
repayment schedule, as with regular installment loans. At the time of your death
or when you sell the house, the loan must be repaid with interest.
# The amount you have to repay cannot exceed the value of your home. With this
feature, you are protected should your home decline in value. The lender cannot
force you to pay more than the value of the home.
Due to the age restrictions on reverse mortgages, they are not for everyone. But
if you qualify, it could provide an excellent opportunity to have an income
during your retirement years.
About the Author:
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro
Marketing, a firm devoted to informational Websites, including
www.End-Your-Debt.com/ and
www.HomeEquityHelp.net/ |
