Retirees with gaps in their long term budgets have the option to use the equity of their home with a reverse mortgage. These programs are loans that allow repayment to be deferred. Like any major financial decision, take time to carefully consider your options. Review the following five reverse mortgage guidelines, and let Century 21 help you prepare with the information you need.

Know the Eligibility Requirements

There are restrictions on who can apply for these loans. Borrowers must be of a certain age and are required to maintain permanent residence in their home. There are also restrictions on the types of properties that are eligible.

Know the Value of Your Home

The money you borrow is applied against the value of your home. Some borrowers run into trouble after failing to have their home properly appraised before accepting a loan. The full market value of your home will affect more than just the loan amount. It also makes a difference on the terms of repayment.

Know the Repayment Terms

The loan balance must be paid back to the bank when you are done using your home. This can occur whenever you die, move, or sell your house. Misunderstandings about the repayment terms have led to confusion about these programs. Reverse mortgage guidelines help to reduce the likelihood of errors in your lending program.

Know the Costs

There are often higher fees and interest rates associated with reverse mortgage programs. This is not a fact that is hidden. Banks must carry greater costs to make money immediately available to you. While some may criticize these higher costs, many still value the stable cash flow provided by these programs.

Know Your Rights

While a reverse mortgage is a good solution for many, unscrupulous lenders may attempt to take advantage of unsuspecting consumers. Make certain you know your rights. Understand the risk involved in borrowing against your home before you sign anything. Contact a legal professional to review any documents you are unsure about.

Information is always key to managing your personal finances. Follow Century 21’s reverse mortgage guidelines, and be prepared with the facts. To find out more, give us a call at 1-800-735-2100.