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No matter how you pay back this loan, as you do not need to pay back anything until your death or sell your home or move out of your house permanently. For the eligibility of reverse mortgage you should have own your home and your age should be 62 years or older. For other kind of loans the lender check your income documents for the verification of your repayment status monthly, but in reverse mortgage there is no need of repayment of loan monthly, so you need not require any income proof, even if you have no source of income but still you are eligible of reverse mortgage. With other kind of mortgages you may lose you home incase if you do not make your repayment monthly, but in reverse mortgage you may not lose your home by not making the repayment, mostly reverse mortgages does not require any repayment as long as you live and that is the reason reverse mortgage differs from other loans With reverse mortgage your debt gets increased and the equity of your home decreases, as the lender lends you the cash and you dont make the repayment, and the debt amount get increased as the interest is being added up with your balance loan amount and ultimately your debts increase and your equity decreases, unless the value of your home is getting increased. Incase if the value of your home decreased there will not be any equity left out except your loan amount so it is nothing but spending down your home equity while you live in your home with out the need of making repayments. Exception in reverse mortgages are when you get the loan advance without interest charged on it your debt would remain the same and your equity would grow with the increase in home value. But normally home value does not grow at high rates and also the interest rate is also charged so finally the majority of the reverse mortgages ended up with falling equity and rising debt loans. |
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