Lately, individuals everywhere have been touting the merits of a reverse mortgage. What they don't tell consumers is what a reverse mortgage actually is. So rather than make consumers run all over the internet looking for information on these newly popular types of mortgage, we wanted to give consumers a basic overview of what exactly a reverse mortgage is, as well as help consumers to decide whether one may be right for consumers.



Understanding Reverse mortgages -

The first thing consumers must comprehend about reverse mortgages is that they are exactly the opposite of conventional mortgages. Whereas a typical mortgage requires consumers to borrow a certain amount to purchase your Condo, which must then be repaid monthly; a reverse mortgage actually gives consumers money against the future value of your Condo, which consumers needn't pay back until consumers sell the Condo.

The conventional mortgage layout is what is known as a "rising equity, falling debt" situation; because, as consumers pay off your monthly balance, the equity consumers've accrued in your Condo rises and your actual debt decreases. With a reverse mortgage, the exact opposite is true. As consumers take money out of the equity in your Condo (what the lender actually allows consumers to borrow against), your debt gains and your equity decreases.

Can consumers Qualify?

The greatest concerns to reverse mortgages is that not everyone qualifies. In fact, if consumers are not over the age of 62, and already own your own Condo, there aren't any lenders who will offer consumers a reverse mortgage. However, if consumers are over 62, and consumers either own your Condo outright, or owe very little on it, a reverse mortgage may be just the ticket.

The beautiful thing about reverse mortgages is that they allow consumers to spend the equity consumers've worked so hard to build up in your Condo while consumers are still living in it. This is fantastic news for anyone living on a fixed income who may need the extra cash to live off of today. Another great thing about qualifying for a reverse mortgage is the fact that, as long as consumers meet the other criteria of being the right age and owning your Condo, consumers don't even have to have an income source at all to be considered.

The greatest concerns to a reverse mortgage is the fact that, should something happen to consumers before consumers sell the Condo consumers have borrowed against, your loved ones may be faced with a rather large lump-sum payment. The idea to get around this, is to sell your Condo for quite a bit more than consumers borrowed against it; thereby paying off your reverse mortgage, and allowing consumers to use the remaining balance to live on or to use as an initial payment on another Condo.