It is important that you understand that reverse mortgages are loans. Ideally reverse mortgages target any home owner who is not only aged above 62 years but one who has a good home equity. In this cases such a home owner can be loaned money that is equivalent to the value of his or her home and then get the funds as fixed monthly payments or a lump sum amount. Contrary to other types of mortgage loans there is no law compelling you to make any payment of the loan. When you die that is when your entire loan becomes due for payment. In most cases the financial institutions will structure the payment in such a way that your payment will not go beyond the value of your home. Therefore in the event the loaned money will be more than the borrowers home value it is the lender to suffer the loss and the borrower will not be held accountable for the loss. This is to ensure that the interest of the borrower is well taken care of. This makes it important for most lenders to assess factors that could lead to these possible losses like home values in the area going down or the borrower living for more years than the two parties had ever thought.
Therefore with reverse mortgages the loaners are not the ones who pay the loan rather it is the lenders who pay them. Besides it is the home owner who decides how he or she wants to be receiving the payments from the lender. In addition the home owner will have the home ownership document until he or she is dead and the lender can now take the property. Mostly if the homeowners heirs decide to pay the mortgage loan the lenders cannot deny them the opportunity. Once the heirs pay the mortgage they will be allowed to keep the home after the death of the owner.
Reverse mortgages are the best mortgage type you can take since their proceeds are not taxed. This added to the fact that you will not be required to make monthly loan payments make reverse mortgages the best option for those seniors who d not want these monthly commitments.
If you are looking for reverse mortgage options then there is a number of them to choose from. You can choose to take a line of credit reverse mortgage, equal monthly payments, or even term payments and a line credit. All these have specific and unique advantages, terms and conditions and it is important that you consider each of them carefully before making a choice. Whichever the reverse mortgage you take your old age will be well taken care of.