Reverse Mortgage to Stop Foreclosure
Reverse mortgages have long been associated with a bad stigma. From high fees to the bank suddenly foreclosing on a property, the misconceptions of reverse mortgages have kept seniors away. Only recently have borrowers been more informed and educated with some of the benefits of a reverse mortgage. One of the unknown benefits of a reverse mortgage is that it can actually stop a foreclosure. If a borrower, 62 or older, has an existing mortgage and has fallen behind on monthly payments because of loss of income or another reason, a reverse mortgage may be a good option.
How does a reverse mortgage stop foreclosure?A reverse mortgage allows a borrower, aged 62 or older, to borrow against the equity in their property. The lender will actually provide either a monthly payment to the borrower, a line of credit, or a lump sum payment to the borrower. The important point to note is that there must be enough equity in the property to actually take out a reverse mortgage. The exact amount of equity will depend on the age of the youngest borrower. Generally, a bank will loan at most anywhere from 60% to 70% of the property value.
The borrower still legally retains title to their property with a reverse mortgage loan. In fact, the borrower does not need to make any payments until the borrower moves, passes away or sells the home.
Contact one of our licensed reverse mortgage agents today to learn how a reverse mortgage and stop a foreclosure.