A traditional mortgage lets the borrower access funds for purchasing a home while reverse mortgage works in the exact opposite way. By taking the reverse mortgage AZ, the borrower is simply withdrawing some of their home equity and converting it into cash. However, the reverse mortgage is not available to everyone.
The borrower should be aged 62 years and above. Therefore, the reverse mortgage Arizona is a good option after retirement. Consider this type of scenario…after retiring, funding daily expenses can get tough, as you may not have a regular source of income.
Therefore, with a reverse mortgage Arizona, you can live your life without any financial difficulties. In this post, I enlighten you on different things that you may not be aware of, regarding reverse mortgage.
What are the eligibility requirements for Reverse Mortgage AZ?
If the idea of reverse mortgage Arizona is a new thing, you may be wondering about the eligibility requirements. of course, just like other loans it is important you understand how to qualify for a reverse mortgage in Arizona. Apart from the age requirements, there are other requirements to fulfill. Let us go through the requirements to qualify for a reverse mortgage Arizona.
- You must own the home to be allowed to borrow against it.
- Ensure that all other outstanding mortgages have been paid in full
- The property should be your primary residence
- Ensure that all property taxes are paid in full, including the mandatory obligations and homeowners insurance.
- The property should be well maintained and kept in good condition
- A single family home with up to four units
How does a reverse mortgage work?
Just like applying for other loans, before you sign on the dotted line you need to know what to expect. For a starter, the reverse mortgage lenders AZ may not allow you to borrow the full value of the property even if you have paid it off.
Therefore, the amount that you can borrow varies based on the age of the youngest borrower or the eligible non borrowing spouse. Moreover, the prevailing interest rate matters when it comes to determining the amount that you can borrow.
How can I Access the Amount borrowed?
Not only does the amount that you can borrow vary, the options for how you accept the funds will also vary. Therefore, if you choose reverse mortgage AZ with a fixed interest rate, you will receive a single disbursement lump sum payment. If you opt for the reverse mortgage with a variable rate, choose either of the following options:
- Equal monthly payments provided at least one borrower lives in the property as the primary residence
- Ensure monthly payments for a fixed period of moths as agreed on ahead of time
- Choose the line of credit that can be accessed until exhausting
- Combination of line of credit and fixed monthly payments so long as you live in the home
- Combine line of credit and a monthly payments for a set length of time
Remember that the amount borrowed as reverse mortgage does not require repayments until the borrower has died. Other instances include leaving the home irrespective of the reasons. Therefore, if you choose to live with your children or move to an elderly persons care center, the reverse mortgage lender will demand the payment.
What are some of the advantages of reverse mortgage?
- The borrower does not need to make monthly payments towards the loan balance
- The There is no limitation on how you can use the reverse mortgage
- The borrower can use the funds to fund his or her retirement expenses
- Non borrowing spouse who is not listed on the mortgage is allowed to stay in the home after an unfortunate death of the borrower
What are the disadvantages of a Reverse Mortgage?
- The borrower is expected to maintain the house and ensure that all property taxes are fully paid
- A reverse mortgage Arizona forces you to borrow against the home equity which is a key source of income
- The fees and closing costs can be very high
What costs are associated with a reverse mortgage?
The reverse mortgage is a good idea for the retired seniors. Before you apply for a reverse mortgage, it is important you understand what costs are associated. Here is a breakdown of the associated costs:
- Mortgage insurance premium
- The origination fee
- Cost of servicing reverse mortgage Arizona
- Third party costs
- The interest rates
Therefore, you know what a reverse mortgage is and what is involved. For reverse mortgage Arizona, come to https://www.sunamerican.com/.