In a regular mortgage, a homeowner makes a monthly payment to the lender, and after each payment, the equity in their property increases. At the end of the mortgage term, the mortgage is typically paid in full and the property is released from the lender to the homeowner. In a reverse mortgage, the home owner makes no payments, but instead, the equity in their property is released in the form of a lump sum or multiple payments. The homeowner's obligation to repay the loan is deferred to a definitive point in the future, determinant upon the terms of the mortgage. Reverse Mortgage loans are usually repayable when the homeowner leaves the property for a number of consecutive months due to illness, or upon death of the homeowner. At that point, the home is then sold and the reverse mortgage can be paid off with the proceeds of the sale, or the property can be refinanced with a regular mortgage. If the proceeds from the sale of the home are not enough to pay off the reverse mortgage, then the bank will cover the difference. If the proceeds surpass the loan amount including all the fees and interest, then the homeowner or their estate will receive the balance.

There are no minimum income or credit requirements for a reverse mortgage, but there are other requirements and factors that determine the amount of equity that can be released from a property.

The five main factors in determining the amount of money that will be received from a reverse mortgage are:

• Property Value from Appraisal.
• Interest Rates.
• Age of Homeowner- 62 year old minimum – older candidates qualify for more money.
• Method of Payment - line of credit, monthly payments, or lump sum.
• Property Location - limits change from county to county.

At S.J. Packman & Associates, before we make any recommendations, our attorneys, certified debt specialists, and paralegals, are trained to ask the right questions to find out about your specific situation. Based on your current income and your financial hardship, we will determine which course of action will work best for you. We do not only offer one path, as there is no one process that can solve everyone’s needs. We will take our time with you and help evaluate what your best course of action should be. Call now and one of our advisors will be there to get you started on your path to financial freedom. There is no obligation to enroll, so don’t delay.