These days the cost of living as increased like anything may it be the food that we consume daily basis, or the medical expense and it is especially problematic in these circumstances when the country is facing economic problems. Well even in this crisis people aged 60 or above can take reverse mortgage to maintain the equity in their home. The reverse mortgage loan is 100% approved by the government insured through the FHA which means Federal Housing Administration. However the property or the home is evaluated by FHA through strict fair means, which is approved by the federal law to take reverse mortgage and charges a 2 to 3% MIP (Mortgage Insurance Premium)
The requirement of FHA is that the borrowers have to go through counseling before applying for a reverse mortgage loan to the lenders. It is also necessary for the borrowers to reside in the same place where the property is being reversed mortgage apart from this there is no income or credit required.
The capital is tax free which is obtained from a reverse mortgage and can be used as combination of credit line or say monthly income. In spite of this the borrowers of home owning are bind to pay taxes and insurance for their homes.
Social security and Medicare benefits are also included in reverse mortgage loan. The foremost thing completely depends on certain factors, say for instance age of borrower, value of property, and interest rates for reverse mortgage. Value on reverse mortgage has been recently raised to $625,500. Huge sum of money will be received if the person is much more experience or senior. The FHA makes sure that the reverse mortgage programs are secured in order to protect the senior if in any case home values are deteriorating.
To protect the foreclosure one can use the reverse mortgage to eliminate the present mortgage. However the tax-free cash can be used in different ways according to the seniors comfort such as it can be spent on vacation, home re-modeling, travelling or purchasing new car.
The money is not required to pay back, as long as the senior makes stay in the same house. If the senior has deceased or the house is being sold in that case the mortgage debt money has to be paid and the remaining amount can be transferred on to the estate.
Recently there has been a change in law so that the elderly people can purchase the house with the money from a reverse mortgage.