If you are a senior citizen and looking for a mortgage, then this is for you!
Legally, lenders are not allowed to discriminate against anyone on the basis of age. Mortgages can be confusing, especially for senior citizens. Though, there are many mortgage options available to our senior citizens.
Types
New mortgage
The main qualification required for the new mortgage is the income and your credit history. It is available at Halton Team Mortgages. Call us to know more about this mortgage.
Second mortgage
As you know the second mortgage is taken in addition to your first mortgage. This mortgage is for a smaller amount than the primary mortgage.
Mortgage Refinancing
This type of mortgage is taken to achieve one of these: a) decrease the interest rate – monthly payment amounts, or b) to utilize home equity. It can also be used to lengthen or reduce time period of the total mortgage. A longer term usually means lower monthly payments.
Reverse mortgage
Now this mortgage is important. This mortgage provides income to the senior citizens. To qualify for this mortgage, you should be at least 62 years old and have equity in the home. This mortgage is called as a reverse mortgage because with time the money owed to the lender will increase instead of decreasing. The mortgage term is usually of 30 years. At the end, the home is completely owned by the lender and zero home equity of the owner. They can then sell it to pay off the mortgage. If the homeowner dies before the term is over, the heir can then sell the property to pay off the mortgage or refinance it. It is one of the most popular mortgages among senior citizens. It helps you to cope-up with the worries of the living expenses.
Some of the benefits of a reverse mortgage are:
- You can choose according to your need – monthly payments, credit-line or a large sum of money. You can enjoy complete flexibility in the mode and structure of getting your payments.
- Based on your home’s market value, the total mortgage amount is decided.
- If you die during the mortgage term and your heir decides to refinance the property, the ability to refinance is greater as the mortgage will never be more than the market value of your house. If the heir decides to sell the house, he will be still left with some money as his inheritance.
- It is comparatively easy to pay off a reverse mortgage early, in full or part, without penalty.
- Terms are flexible and you should be able to change your payment options.
HELOC
This kind of mortgages uses home equity as collateral for the mortgage. Home Equity Loans are loans that use home equity as collateral for the loan. Depending upon the amount of equity in a home, you can take the mortgage for various amounts. This money can be used to pay various expenses.