Fast Facts about Reverse Mortgages

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Oct 13, 2010

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Colorado - Denver Metro , Colorado - Denver North Metro , Colorado - Denver South Metro

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What is a reverse mortgage?
A reverse mortgage enables you to withdraw a portion of your homes equity, use it anyway that you like, have no monthly payments, stay in your home as long as you like and when you are ready to sell your home or you have passed, the loan is repaid. This program is insured by the Federal Government. You do not forfeit title to your home or lose any rights as the homeowner. You or your heirs decide when or if the home is to be sold and after repaying the loan balance, all remaining equity in the home belongs to you or your heirs.

Who qualifies? Qualifying simply requires that the homeowner(s) be 62 years of age or older, own the home as their primary residence, meet standard FHA Appraisal guidelines for property type, value and condition

Is it safe? In 1988 HUD adopted reverse mortgages and with the assistance of congress, enacted laws that put into place 12 safeguards that guarantee a senior will not give up title to their home and will not put themselves, their home or their family in any financial risk. Paying off a traditional mortgage with a reverse mortgage secures the home and eliminates the risk of foreclosure due to an inability to make a monthly mortgage payment.

How much of my equity may I use and how do I take the funds? HUD provides authorized lenders with a Reverse Mortgage Calculator that will determine the amount of equity available to a homeowner. The determining factors are the borrowers age, home value and current interest rate. From this calculation, fees are deducted and any existing mortgage balances are paid in full. The amount that remains is available to the homeowner to draw as a lump sum, treat as a line of credit, receive monthly tax-free income, or any combination of these three options. Regardless of how you choose to draw your funds, you will make no monthly payment. Interest accrues only against the funds you draw, and all remaining equity belongs to you or your heirs.

How do I select a lender? It is not interest rates and fees that distinguish reverse mortgage lenders, it is depth of knowledge. While a growing number of traditional lenders offer reverse mortgages, you will want to select a Colorado Based Lender that is dedicated to reverse mortgage lending.

Editors Note: This article was submitted by 1st Reverse Mortgage USA. Please feel free to contact Dave Harder, 303-904-info (4636) or by e-mail, dcharder@1strmusa.com

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