Can You Qualify For A Reverse Mortgage With No Income
Under the Peoria reverse mortgage for Seniors program, your income is not even a consideration in qualifying for a reverse mortgage! All the loans that you have qualified for up to this point in your life required that you meet certain income levels to meet their ratios. This is simply not true with a Peoria reverse mortgage. Since you have no obligation to pay back the loan each month, your income is not considered. You can have no income at all and still qualify for a Peoria reverse mortgage! Under a traditional home loan, if you fail to make your payments, you could lose your home. With a Peoria reverse mortgage, no obligation to make monthly payments exists, so you cannot lose your home for any reason other than not paying your taxes or homeowner's insurance.
Most Peoria reverse mortgages require no repayment for as long as you live in the home. A simple formula can be used to explain the difference between forward mortgages and Peoria reverse mortgages. The Home Value minus Debt equals Equity or (V-D=E). In a traditional or forward mortgage, as you make loan repayments, you reduce Debt (D) and thus increase Equity (E). Under a Peoria reverse mortgage, each time the lender disburses cash to you (whether by lump sum or by monthly payments), the Debt (D) is increased and Equity (E) is decreased. If you should live in the home long enough that the equity is reduced to zero, then the required Peoria reverse mortgage insurance kicks in and continues the monthly payments until you pass on or move from the home.
The Peoria reverse mortgage Debt can never exceed the value of the home. So, both forward and reverse mortgages affect how much equity or ownership you have in your home - but in opposite ways. Most residential property in the United States appreciates in value over time. So, one of the critical factors that is considered heavily by Peoria reverse mortgage lenders is the exact area in which you live. If your home is in an area where properties are losing value, then the lender will, necessarily, be less aggressive in valuing the maximum loan amount of your Peoria reverse mortgage. In most areas however, residential real estate can be expected to increase in value over the life of the Peoria reverse mortgage. If your home is in a rapidly appreciating area, the Peoria reverse mortgage payments to you will not be fully realized in your resulting equity. In other words, the value of your home may grow almost as fast as the debt is increased by the Peoria reverse mortgage, leaving you with almost as much equity.
You can look at this as though you are able to realize much of the appreciation of your home in cash rather than having to wait to sell the home. Of course, you cannot expect your home to continue to rise in value at a rapid rate for a long time. It may for a while, but not over a period of more than a few years. Entering into a reverse mortgage, you should always expect your debt amount to rise and your equity to thus decrease. If the home appreciates quickly, that would be a good surprise, but you shouldn't budget on that happening over the long term. Before moving forward with a reverse mortgage, take the time to learn as much as possible about the Reverse Mortgage program, its Pro's and Con's, and be a well educated consumer. You will be glad you did!
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