Reverse MortgagesTopic: Mortgage
When you are a person 62 years old or older you may use the reverse mortgage (a special type of home refinance). This is a way that a person can pull money out of his home without having to make payments on the line of credit or lump sum that they receive. With this type of program there is no payment or repayment of the loan and the money may be distributed in one lump sum payment, used to create a fixed income for the duration of life, or it may be used as a line of credit to be drawn upon as needed. These options can also be combined depending upon the homeowner's particular situation.
Down and out financially doesn't need to be your situation in life to use this type of loan. You may just want to pay off an existing loan balance and not have any more payments. Freeing up the equity in your home can improve the quality of your life. The money can be used for vacationing, paying medical bills, sending a grandchild to college, or just supplementing retirement income. You have worked hard to build the equity in your home, why not enjoy it now!
Unlike a conventional loan, there are no credit standards or income qualifications. The two most important factors are your age and the value of your home. The reverse mortgage process usually will take about 30 days before you can receive your money.
When you use this type of program the title to the property will stay in your name, you are not transferring the ownership of the home. If at some point you choose to sell your home and move to another residence, you can. What go to the bank would be the closing costs, principle borrowed and interest on the loan calculated daily. The remaining equity in the home is all yours. Another commonly asked question is, is there any negative tax consequences for using a reverse mortgage? The answer is that it is just like any other type of refinance and is not taxable income.
When your heirs receive your home they will need to either refinance the house, if they choose to retain it, or they will need to sell it. They will receive the remaining equity in the home, which would be the difference between the principal borrowed, the accrued interest, closing costs, and commissions.
One of the safeguards the federal government has put in place to make sure the consumer understands exactly how this type of product works is the requirement that you participate in a HUD-approved counseling session. This can be done over the phone and there are several different agencies who can offer this service to you free of charge. Once you have completed the counseling session, you will be mailed a certification to validate that you have met the federal government requirements to be counseled by an independent third party.
In conclusion, if you would like to use the equity in your home to more thoroughly enjoy your golden years, it is a fairly simple process to find out how much a reverse mortgage can benefit you. You will be able to examine all different types of products with a range of options everything you should know is the approximate value of your home and your age.
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Yes if the two borrowers had feormd a legal partnership of some sort (like an LLC or corporation). You could have different names on the different promissory note but both be named in the mortgages and share interest on title assigning it to the partnership name.
part of the settlement costs you buy gives the Financial Institution title incsuanre for mistakes (by the way, normally if you the Buyer want optional title incsuanre, then they want extra $ $ . This is why I believe it is not possible to have 2 half-half mortgages on same property, or two separate and unknown parties buying the same property bec Financial Institution and maybe local government would require a single deed with 2 names that could be tied to same property, and mortgage loan would also be one. Problem or rather extra expenses might come down the road when 2 parties for some reason split go separate ways or if one buys out the other, it takes a legal contract to change and record new ownership deed. There are cases where owners can be replace via ASSUMPTION OF MORTGAGES but I would advise doing everything they correct way bec say one owner buys out the other owner and then tries to sell eventually down the road and the TITLE DEED is a mess bec legal documents are missing or say they can't find other owner and written contract wasn't notarized or prepared by attorney/lawyer where it's one party's word vs another. Such a situation go literally STOP one from selling DEAD IN ITS TRACKS trying to take a short cut and maybe costs more in the long run to untangle compared to both parties in the beginning applying for a mortgage as joint owners.I'm not an attorney and only participated in several (5-10) real estate transactions and hope I understood your question correctly and that my explanation was sufficient
Heckuva good job. I sure appriectae it.
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