Mortgage Lending Library
Reverse mortgages are loans that reverse what a loan is supposed to be. In a traditional home loan, you pay the lender, for example, while in reverse mortgages lenders pay you. In most home loans, you pay your way to greater home equity, while is reverse mortgages, you use your home’s equity. Reverse mortgages are sometimes referred to as debt consolidation loans, bad credit debt consolidation loans, home equity loan options, home equity loan refinancing, cash out refinance loan options, mortgage cash out refinancing, or cash back loans. In all cases, the idea is the same: you borrow against the equity of your home. Reverse mortgages are often used by those in financial distress or by those over 62 in order to generate income, pay for needed medical or educational expenses, and to generate extra money for home repairs, investments, or travel. Many people also use reverse mortgages for debt consolidation. Using reverse mortgages for debt consolidation can give borrowers extra time and some tax breaks to pay off their debts. Most reverse mortgages are tax-deductible and offer the same generous terms as traditional mortgages. A home equity loan, whether used for debt consolidation or some other purpose, will generally allow you to keep title of your home and will even allow you to put off payments on the loan until everyone has moved out of the property. In most cases, you can only take out a home equity loan or home equity line of credit on a primary residence. A home equity loan rate varies widely, but home equity loan refinancing is generally very affordable and offers the same low interest rates you can expect on a new home loan. If reverse mortgages interest you, spend some time comparing home equity loans. Find reverse mortgages that offer a low home equity loan rate and that are offered by reputable lenders who have lots of experience with home equity loan refinancing. Some comparison shopping will help you find the home equity loan lowest rate and will show you all the different reverse mortgages out there. If you need to take out a bad credit home equity loan, you may have to pay higher interest than those who have good credit for a traditional home equity loan. However, even a bad credit home equity line of credit offers a better home equity loan rate than many other kinds of financing.