10 Important Basic Facts About Reverse Mortgage Home Equity Loans | Part 2 of 2
-->6) What is the minimum age requirement?
Sad to say, the minimum age is 62.
7) Is there any hidden expenses in reverse mortgage home equity loans?
Now, this is a very common question being asked always. Some of the common hidden expenses charged to the borrower of a reverse mortgage by the lending company will include the following:
A) Closing costs
B) Origination fees
C) Growing interest percentage
D) And other various mortgage fees.
The fees associated with your mortgage plan are priced at the discretion of the lender and the lender has the rights to increase the fees at their own will which will likely to increase over time.
8 ) Is there any borrower obligations to obligate too?
In some ways, there are some obligations to obey too. In reverse mortgage, the borrower keeps the title to their home and retains all financial responsibility associated with home ownership which will includes all tax liability. Do take note that the home-owner insurance is mandatory when acquiring a reverse mortgage and is the borrower’s financial responsibility until the mortgage is repaid in full.
9) Are there any borrower consequences in the future?
There is! For example, if the borrower fails to fulfill his/her obligation under the terms of the reverse mortgage contract and when the mortgage contract generally becomes due or expired due to the dateline reached, it will lead to violations that might result in the borrower the need to immediately repay the lender which also risk unable to keep the home ownership. Un-adequately insured or failure to pay tax liability or failure to maintain basic utilities or serious neglect to the home will also lead to its depreciation.
10) Can I avoid tax deductions due to the reverse loan?
Often time the borrower will not be able to repay the reverse mortgage even until the house is sold therefore the borrowers are generally not eligible for an annual interest tax deduction. The borrower will pay for the tax only when the interest payments have been made partially or in whole within any given tax year. But if no payment before the home is sold, paying for interest tax can only be claimed for the year the sale took place. Hope you have the whole picture now.