If you want to go for reverse mortgage, then you should better understand what is reverse mortgage and how does a reverse mortgage works. A reverse mortgage is conventional mortgage loans. Here you need not to make monthly mortgage payments; rather you can get payment on monthly basis or get one time large amount as a reverse mortgage.
A reverse mortgage is available for people above 62 years of age in States and this kind of mortgage products are also available in other countries in different names. This is called reverse mortgage as this is just the reverse to the conventional mortgage loans in the sense that instead of paying monthly mortgage payments you are getting monthly payments in reverse mortgage.
The basic requirements for reverse mortgage are as follows…
- The person must be more than 62 years of age.
- The person should be the primary owner of the property.
- The mortgage should be paid off or have good amount of equity.
- All the co-owners should apply for the reverse mortgage and the owners should be eligible for the reverse mortgage.
You are not expected to pay off the reverse mortgage as long as you use the property as your primary residence but as soon as you move to any other house the mortgage will immediately will be due. The will be payable upon the death all the co-owners.
Say for if the husband and wife both the co-owner of the property then upon the death of the husband, the wife needs not to make pay it off. So reverse mortgage is certainly a very good source of tax-free monthly income for elderly people.