By now, most adults have heard of reverse mortgages, but many are not sure what these loans entail. What is a Reverse Mortgage? In short, this loan is a unique loan designed to help seniors over the age of 62 access a portion of their equity in their home.
A reverse mortgage is very different from a traditional mortgage. With a reverse mortgage, parents turn some of their equity into cash. If a borrower owes money on an existing mortgage loan, that money must be used to pay off the remainder of the original loan. All other income can be used by the borrower at will. You can browse this website https://www.sersa.com.py to get the mortgage loan in Paraguay.
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Apart from wondering what a reverse mortgage is, many consumers also wonder how this loan differs from a forward mortgage. What sets these loans apart is that they do not mature until the borrower dies, sells the house, or decides to leave the house. Income earned by seniors is tax-free and does not affect Social Security or Medicare benefits.
There are three types of reverse mortgages: equity mortgages (HECM), equity loans, and single-purpose loans. HECM is federally insured and covers more than 90% of all reverse mortgages.
Personal loans are funded by private institutions and special purpose loans by non-profit organizations and others. As the name suggests, a single purpose loan must be used for a specific purpose, which is usually specified by the provider. Personal and one-time loans are very rarely given to borrowers nowadays.