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MBA Urges Regulators To Avoid Invoking Suitability Standards
The Mortgage Bankers Association (MBA) recently made a preemptive strike against what it obviously perceives as the next threat against the mortgage industry - "suitability standards." Read more...

 

Are You Interested In Reverse Equity Mortgage. Here Is What You Should Know

The reverse equity mortgage is the opposite of a traditional mortgage. In other words, instead of you paying the mortgage lender some monthly sums, it pays you. As strange as it might sound, the reverse equity mortgage really works this way and the loan you get this way is only paid off when you sell the house. Aside from that, the amount of money you get from reverse equity mortgage is not considered by the law as an actual income, therefore you do not have to pay taxes for it.

In order to be eligible for such a reverse equity mortgage you have to be at least 62 years old and be registered with no current bankruptcy. As the loan is on your home, you are not required to have any stable income, nor a god credit score. In fact, given the fact that the reverse equity mortgage is especially designed to help senior citizens, it would be quite strange to ask them to have an income when they are retired. Therefore, there is no personal liability for repayment of a reverse equity mortgage.

The advantages provided by reverse equity mortgage have to do with the fact that although you might not receive a huge amount of money, you may choose the way in which you get them. You can either go for lifetime monthly income, lump sums, or credit lines for future borrowings. It al depends on how you plan on spending the money and on the possibilities offered to you by the reverse equity mortgage provider.

The limits that apply to each case vary according to some criteria, such as the adjustable interest rate at the time the mortgage is originated, the age of the youngest homeowner, the market appraisal of the home and the lenders maximum loan limit.

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