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For senior citizens, making ends meet can be very difficult. For homeowner over the age of 62, who have to make their mortgage payments, there is an option. A reverse mortgage was designed for a homeowner to take the equity of their home and convert it into tax-free income, without having to refinance or sell their home. It gives the homeowner additional monthly income.

The procedure for a reverse mortgage loan is that the flow of money is reversed, the homeowner does not pay the lender, and the homeowner is paid by the lender.

There are several options that a homeowner has to receive the money once he or she has been approved for a reverse loan.

The money can be distributed in a lump sum payment, monthly payments, or a credit line. A combination of all three is also an option. The choice is the homeowners. Most often, the homeowner will choose the line of credit because they can access it at any time.

Another benefit to a reverse loan is that when the homeowner chooses a line of credit, the unused balance grows. The growth is based on the appreciation of the house, not on the interest.

It is important to remember that the not all reverse loans have this feature. It can obtained through FHA home equity conversions. There are however several factors that are taken into consideration when applying for a reverse loan. The amount of money you can take out as a loan, which include the age of the youngest spouse, the current value of the home, any lending caps in the area in which you live, and the interest rates.

If the value of your home is higher than the amount you owe, then you may be eligible for the maximum loan amount. Your age also matters in this instance as the older you are the more money you will receive.

The style of your home is also very important. If you have a single family home or a home that was built before 1976, you may be eligible. Townhouses and Condo's are also eligible for a reverse loan as is properties up to four units. As a rule, co-ops are not eligible for a reverse loan.

When you receive your reverse mortgage loan, you can use the money for anything. Whether you choose to do home improvements or go on vacation, the choice is yours.

If you have an existing mortgage, you can still qualify for a reverse loan. The only requirement is that the existing mortgage must be paid in full. This can be done by using the funds from the reverse loan. In many instances, the amount of the reverse loan will cover the amount of the mortgage and you will not have to add any additional funds.

A reverse mortgage does not affect social security or Medicare. It can however affect you if you have Medicaid because it is income-based eligibility.