What is a Reverse Annuity Mortgage (RAM)?
A reverse mortgage is a type of home equity loan that allows you to convert some of the equity in your home into cash while you retain home ownership. RAMs works much like traditional mortgages, only in reverse. Rather than making a payment to your lender each month, the lender pays you. Unlike conventional home equity loans, most RAMs do not require any repayment of principal, interest, or servicing fees for as long as you live in your home. Funds obtained from an RM may be used for any purpose, including meeting housing expenses such as taxes, insurance, fuel, and maintenance costs.
To qualify for an RAM, you must own your home. The RAM funds may be paid to you in a lump sum, in monthly advances, through a line-of-credit, or in a combination of the three, depending on the type of RAM and the lender. The amount you are eligible to borrow generally is based on your age, the equity in your home, and the interest rate the lender is charging.
Because you retain title to your home with an RAM, you also remain responsible for taxes, repairs, and maintenance. Depending on the plan you select, your RAM becomes due with interest either when you permanently move, sell your home, die, or reach the end of the pre-selected loan term. The lender does not take title to your home when you die, but your heirs must pay off the loan. The debt is usually repaid by refinancing the loan into a forward mortgage (if the heirs are eligible) or by using the proceeds from the sale of your home.
If you would like to know more details about RAM’s, Andy Aun, with Aun and McKay Law Firm will be discussing RAM’s in this months Tudor and Tour Seminar. All seminars are FREE and everyone is welcome. There will also be food and beverages so please come out and enjoy meeting and talking with each other. Please find the flyer below to obtain information such as time and location as well as RSVP requests. If you would like additional information about RAMs or any other type of financing, you need to call Erica West, with New American Mortgage at (803) 528-5019 or visit her Face Book Page at “Mortgage Go To Gal”.
If you are interested in getting your Real Estate License, Appraisal License, Property Management License or Home Inspector License, give us a call at the Real Estate School for Success, (803) 807-9152 or you can register online. You can receive a 15% discount on those classes by entering the PROMO CODE below when registering on line.
DISCOUNT PROMO CODE IS: Reverse
January Reverse Mortgage Flyer.jpg (290.78 kb) Andy Aun Tudor and Tour Seminar Flyer
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