Maggie Evans 
When you are facing retirement, you might have some trepidation. Figuring out how to continue to meet your financial obligations could be difficult. However, you can rid yourself of those worries, if you use your existing assets properly. For example, your home can be a great source of cash you can spend. All it takes to do so is a home loan. Once you decide to get such a loan, you must decide between a traditional loan or a reverse mortgage. Here are some facts to make that choice easier.
A Reverse Mortgage is Longer Than a Traditional Loan
When you apply for a standard home mortgage, the agreement requires partial repayments to be made by certain dates. The end goal is to pay off the entire loan by the specific date established using those partial frequent payments. The span of time for which the loan lasts is known as the loan period. A normal loan period for a regular home loan is often five years, but it can vary slightly.
A reverse mortgage does not work in that manner. Instead, you have an open-ended amount of time to repay the full loan balance. You also do not have to pay portions of it by particular dates. Therefore, you have two types of relief. The first is the knowledge that you are not limited by a ticking clock. The second is knowing you have no mortgage payments that you have to make at specific times for the duration of the agreement.
Coming Up with Money to Borrow
When you are considering a reverse mortgage, one of the first things to find out is what money you can actually borrow. For that, you need to do reverse-loan calculator amortization online. Reverse loan calculators do necessary calculations for you and your lender. When you use reverse mortgage calculators, the sum the online tools come up with and the sum you expect may be quite different. That is because figuring out the total value of your home on your own is nearly impossible. You also have to understand rules exist to prevent the full amount from being free to borrow.
The next step in the process is establishing your way of getting the available money. Once the reverse mortgage calculator establishes the available amount, you have a few choices regarding its delivery to you. A line of credit is one viable option. It allows you to take money out of your home value on your own exact schedule and in particular amounts you desire. However, you can also select to receive a large single payment or get the money you need doling out to you regularly on set dates, almost like replacement paychecks. However, when using any of those options, remember there is a cap on the total amount available. Therefore, you only receive money until you hit that limit.
Exploring Where to Apply for Your Reverse Mortgage
The basic rules of a reverse mortgage are the same wherever you get it. However, the subtle nuances differ from one source to another. For instance, a government reverse mortgage has a special name. It is called a home equity conversion mortgage. It is guaranteed by the government. A private reverse mortgage offers no such guarantee. Private lenders can also set their own rules, within certain federal limitations.
Final Notes and Special Reverse Mortgage Circumstances
There are several reasons you may not think you are eligible for a reverse mortgage or you may not think one is worth it to you. However, think again. Many special circumstances do not preclude you from getting a reverse mortgage. For example, you can still apply if you have a mortgage already. You can also apply for a variation called a jumbo reverse mortgage if your property value is too high to make a regular reverse loan financially worth it. Therefore, it always pays to explore your reverse mortgage options.
