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False Mortgage Research Paper

Decent Essays
REVERSE MORTGAGE | HOME EQUITY CONVERSION MORTGAGE There is a saying that, “one cannot have their cake and eat it too”. Well, in the world of home mortgage, you can actually have your cake and eat it especially in your senior years.
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WHAT IS A REVERSE MORTGAGE?

In the world of home mortgage, a borrower may actually convert part of home equity into cash. This is called REVERSE MORTGAGE. Imagine taking out a loan so you can buy your dream home and yet you can withdraw cash from it that you can use for your needs. So, isn’t that having your cake and eating it too?

If you are 62 years old or older, having extra cash from a Reverse Mortgage can be used for unexpected medical expenses and every day needs as well as supplemental income. It can be used for home repair and maintenance, long-term
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Increased protection for the borrower. The government insurance will cover the difference if upon the sale, the home’s value becomes less than the loan amount; meaning, the loan shall be fully paid only using the proceeds from the sale of your home and nothing more and the Lenders cannot go to the borrower’s heirs for the loan repayment.

HOW DOES REVERSE MORTGAGE WORK AND HOW IS IT DIFFERENT FROM A REGULAR MORTGAGE?

A Regular Mortgage involves a payment to a lender on a monthly basis to purchase your home over a specific time frame or term, whereas the Reverse Mortgage is when a borrower gets a loan where the lender ‘pays you’ by taking parts of the borrower’s home equity (usually tax-free) so that it can be withdrawn as payments in a lump sum, monthly payouts or lines of credit.

One good thing about Reverse Mortgage is that eligibility is not based on the borrower’s income, but instead on the value of the home. It also does not affect Medicare or Social Security
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