For most clients, a reverse mortgage is a financing option of the last resort. The loan allows you to borrow against the equity of your property. With many seniors turning to this option, it is crucial that they make an informed decision. Since the visit to a counselor is mandatory, what should you ask the reverse mortgage consultant in Mahwah, NJ?
It is a waste of time and resources to embark on a program when you are not eligible. Begin by testing your qualification. The basic qualification that does not even require assistance by the consultant is age. Ensure that you are 62+ when making the application. You should also be living in the house as your primary residence and not have a substantial mortgage on the house. The property should also be among those listed as eligible by the FHA. It must meet their standards as well.
The lender disburses your money in several ways depending on the agreement. The plans are designed to meet your financial needs over the short and long term. The first option is a monthly tenure installment that lasts a lifetime or as long as you are living in the house. There is the monthly term payment plan where the term of receiving the payments or installments is limited. There is also a line disbursement where the lender can release your money in installments until you hit a certain limit. You may also take your money in the lump sum from the lender.
When all the money has been disbursed, you are not entitled to any monthly installment. The options available include increasing the loan amount or borrowing against the remaining equity. For most borrowers, refinancing is a better option. It allows you to access reduced interest rates and an increase in FHA limits. The considerations made in this regard include the maximum claim amount, the principle limit and outstanding balance on existing loan.
•Changes in Payment Plan
Upon closing the loan, you can change the plan at your own discretion. This allows you to change from a tenure plan into a term plan. You may also choose to receive the remaining amount in lump sum. These changes can be made any time as long as the limit has not been hit.
Utilize your time with the consultant to fully understand your entitlement. It enables you to take full advantage of these provisions. Engage an experienced consultant who understands the mortgage market in your area. Talking to a reverse mortgage consultant in Mahwah, NJ provides a detailed view of your options.