The Truth About AARP Reverse Mortgages

AARP reverse mortgages are a great way for the senior homeowner to get some much needed help with retirement. In this article I will discuss how AARP reverse mortgages work so you can evaluate whether or not it is something to consider for your circumstances.

First, let's start with who qualifies for a reverse mortgage loan. One of the main requirements is that you have to be 62 years of age or older. Second, you have to be a homeowner with a decent amount of equity in your home. Lastly, if you have a mortgage debt it has to be small or manageable.

What about your credit score or your yearly wage? These two things do not matter when it comes to an AARP reverse mortgage loan; only the three requirements above.

So what makes reverse mortgage loans a good option for those who need help with retirement? Well, the most important thing is that you do not have to make monthly payments on these loans. You pay off the loan when your home is sold. So this means that until you move out or you pass away you don't have to pay a penny on the balance of your loan.

Simply wait until your home is sold and take the money and apply that to the loan. If the value of your home has gone up drastically then you are entitled to what remains. If you've passed away then the money will go to your heirs. If the value of your home is still not enough to cover the loan then the lending institution is required to cover the difference.

AARP reverse mortgages also offer flexibility on how you receive the loan. Do you want it all at once, in monthly payments or would you rather prefer to take out money on it whenever it is needed? All of these options and more are available to you and the choice is yours on how you wish to receive your loan.

The amount of your loan will be determined by the appraisal value of your home, how old you are, how you receive payment and what the interest rates are.

In conclusion, reverse mortgage loans can be a bit complex, especially for those who aren't knowledgeable about them. Because of this the government requires that the senior take a credit counseling class before being able to apply for an AARP reverse mortgage loan.