The Reverse Mortgage Explained

ISLAMORADA, Fla. - Dec. 12, 2022 - PRLog -- Per Kim Bagnell Thaler, "Top Producing Real Estate agent for Sotheby's International in Islamorada Florida."

A reverse mortgage, simply put, is a financial arrangement in which a homeowner's equity is paid out to them in regular installments. Instead of taking out a second mortgage or a line of credit. Homeowners can instead opt for a reverse mortgage.

How Reverse Mortgages Work

Reverse mortgages work in pretty much the way the name suggests. Rather than taking out a loan to purchase a house, a reverse mortgage pays the homeowner using the property's equity and the residence as collateral. Generally, reverse mortgages do not tap into all of the property's equity, and therefore the house can be later sold to pay the balance and still have money left over.

Who Qualifies for a Reverse Mortgage

There are federal guidelines established by housing in Irvine development or HUD that specify which homeowners are eligible for a reverse mortgage. The basic requirements are that homeowners seeking a reverse mortgage do so through their primary residence. Additionally, applicants must be at least 62 years of age or older. And, there is sufficient equity in the property in order to facilitate the loan.

Reverse Mortgage Payback or Payoff

A reverse mortgage generally does not have to be paid back until 6 months after the death of the borrower(s), or the sale of the primary residence used as collateral. Once the loan balance is paid off, if the residents used in the transaction have not already been sold, they can then be put on the market for sale. Any amount that the property sells for above the reverse mortgage balance goes to the estate.

Reverse Mortgage Benefits

There are a few compelling advantages to taking out a reverse mortgage. First and foremost is to tap into a property's equity in order to supplement income. Another benefit is that homeowners can stay in their properties and do not have to sell them until the loan balance is due. Yet another benefit is that a reverse mortgage is relatively easy to qualify for and obtain.

Kim Bagnell Thaler is a pioneer among Florida Keys realtors. She is regarded as one of the most influential realtors in the Middle and Upper Keys, providing expert & professional real estate services. With her vast knowledge, 20 years of experience, and commitment to the highest ethical standards, Kim remains a standout among other Florida Keys Real Estate  Agents. For help finding Florida Keys Real Estate, please see http://www.kimbagnell.com