Buying a house is believed to be the largest investment of a lifetime. It may seem expensive paying a mortgage now, but owning a house can pay off in the future. Reverse mortgages make owning a house beneficial. What is a reverse mortgage in Virginia Beach? A reverse mortgage means exactly as you may think. It means you get paid by the bank instead of making garments like with a traditional mortgage. These mortgages are commonly reserved for senior citizens 62 and older with little equity left in their home.
There are different kinds of reverse mortgages. The most common kind is a government loan called the Home Equity Conversion Mortgage. It guarantees the borrower can stay in their home until they die or move out. The remaining equity passes to the heirs or the borrower. This type includes insurance to protect you in case your lender cannot pay you. A less common type of reverse mortgage is the proprietary reverse mortgage. These mortgages do not have to follow the government regulations of the HECM and insured privately by lenders. They are likewise the more expensive loan. Various factors will determine how much you can borrow such as interest rates, value of your home, and your age. An older borrower with a more valuable home would be allowed a bigger loan. You can opt to get the funds through a credit line, installments, or a lump sum. The most commonly chosen way to get payment is a credit line. The credit line allows you to withdraw funds as needed until they are gone and a lump sum provides you the money all at once. You may also get a combination of installments and a line of credit. Reverse mortgages are available for many types of properties except co-ops. If you have a mortgage, it must be paid off with the current reverse loan. You will be required to take consumer counseling before applying. The counseling has to be taken by government approved agency.
This information should answer “What is a reverse mortgage in Virginia Beach?”. A reverse mortgage is something that can be helpful, but should be taken seriously. The money has to be paid back upon you death or if you move. Overall, it can provide financial relief as needed.
