Reverse Mortgages are available for people over the age of 62 years to convert part of their home equity to tax-free income without the need of selling part of the property, giving up the title, or taking in a new monthly payment rate. It is called reverse because instead of the property owner making payments to the lender, the lender is giving payments to the homeowner.

How Much Can I Get?

The amount is dependent on the age of the owner or the age of the youngest spouse, the appraised home value, the interest rates, and the lending limit in your area, which is set by the government. The older you are, the more valuable your property is set for and the less you owe to the lender, the more money you will be able to receive.

The amount that you get from reverse mortgage can be used in any form that you see to best fit your lifestyle and daily living expenses.

Who Can Get a Reverse Mortgage?

Not all home properties apply. What are eligible are single-family homes, 204 unit properties, homes manufactured after June 1976, condominiums, and townhouses. What is not eligible are cooperative housing, however, there are some private programs in New York that have helped the cooperative homes.

What are the Payment Options?

To receive the money, you can decide which format works best for you. More than 60 percent of people choose to do the line of credit because you can choose the amount of money you want at any time. Other common forms are the lump sum, the fixed monthly payment, which can be set for a term or for the amount of time you are living on the property.

With the line of credit, there is the growth factor, which is just the interest that you have been charged. You do not, however, earn any of this interest.

Is there Interest on this New Mortgage Plan?

An interest is charged on the amount that you do receive from this new loan. The rate is variable that is connected to the index, unless it is through a fixed rate.  A margin is usually added to the interest rate, which is about a one to three percentage point, to the rate that you were previously charged with. The interest is not paid from the available loan amount but from the compounds over the loan until there is repayment.

What if I have an Existing Mortgage?

One is still able to apply for a reverse mortgage loan, even though they have an existing Las Vegas mortgage that is not paid for. In this situation, the reverse mortgage must be in the first lien position, stating that there cannot be any debt that has to be paid off. The reverse loan can help you pay off the existing mortgage, but if the amount is not sufficient, one must receive a grant, assistance from a friend, or money from your own savings. You will not be allowed to receive another loan to help pay the existing loan off.

Are there any Fees?

There is a monthly fee, set by the FHA-HECM program, that is about $30 to $35. You can get an estimate of the amount by calculating your life expectancy multiplies by the monthly fee of $30 or $35.

When do I Pay Back the Loan?

Since there are no monthly installments, the loan is repaid once you cease to occupy your home. The amount owed under the loan is never over the amount of the property, and if the property value is over the reverse mortgage loan amount, then you will receive the excess money.

How Does this Impact My Government Assistance?

At this age, it is quite common for one to be receiving government assistance. It has no affect on your Social Security or your Medicare benefits, however, it can affect your Medicaid eligibility. If you have Medicaid, it is important for you to use the reverse mortgage loan proceeds immediately once received because if it is not used, it can affect your Medicaid eligibility.

When Should You not Choose to take this Loan?

This loan is extremely helpful for the people that are going to stay in their residence for an extended amount of time. If you are planning on staying for only 2-3 years, then the upfront costs will make this loan more expensive for you. In addition, if you are hoping and/or planning on leaving the property to your descendants, then you should not pick this plan because the house usually is sold back to the reverse mortgage company to pay back the loan.

If you have decided to partake in this loan, many Las Vegas mortgage companies offer counseling as a way to ensure that you receive your consumer protection. It will help you understand the programs and other alternate options before deciding on this loan.

If you are living in Las Vegas, Nevada, and you want more information, Reverse Mortgage of Nevada is a company that will able to provide you with more information.