How a Miami Reverse Mortgage Work

A Miami reverse mortgage is different from a typical mortgage in several ways. It’s important for you to understand these differences.

With a reverse mortgage, the lender gives you cash in one of three different forms (lump sum, line of credit or monthly payments,) and you make no repayments while you live in the house. Because of this, the amount you owe gets larger as you get more cash. So the amount you owe (your debt) gets larger as you get more cash and more interest is added to your loan balance. As your debt grows, your equity in the house decreases.

When a reverse mortgage becomes due, you may owe a lot of money and your equity may be very small. If you have the loan for a long time, there may be no equity left at the end of the home loan. However, no matter how long you stay in the house, you or your heirs can never owe more than your home's value.

Also, you won’t make any monthly repayments until you die, sell your home or permanently move out of your home. Therefore, you don’t need any income to qualify. You could have no income and still qualify for a reverse mortgage.

The amount you can borrow depends on a few factors:

• Your age
• The current interest rate
• The appraised value of your home or FHA’s mortgage limits for your area

In general, the older you are, the lower the interest rates are and the more valuable your house is, the larger amount of money you can borrow.

Like all homeowners, you are still required to pay your real estate taxes and other payments such as utilities. However, you can never be foreclosed from your home because you missed your monthly mortgage payment.