There are so many people suffering from the real estate meltdown going on that the moment. Many people who decided to let go of their homes in order to invest in a cheaper one and save the extra income for their pensions are now at a loss as to what to do since homes have now declined sharply in value.

Many people are being advice to do reverse mortgages. Here are a couple of facts about reverse mortgage. Reverse mortgage is only allowed for people 62 years or older and they should have paid their mortgages in full or almost completed their mortgage payments. Your main home is the only home that is always taken account. This is due to the fact that the non taxable income you will be given is your home’s principal amount built over the years. A home can only be classified as your main one only if you live there more than half of every year.

Reverse mortgage fees have declined a lot after the Housing & Economic Recovery Act was signed two years ago. The fees are now just 2 percent if you borrow up to $200,000 and just one percent if you borrow over that amount. The fee should however be between $25, 00 and $6,000.

Majority of Americans can borrow up to $417,000 but other living in high cost housing cities can borrow a maximum of $625,000. Annuities and other financial products are no longer linked to any of these loans.

Some lenders charge higher interests and charge zero origination fee and some of them also charge very low origination and servicing fees.

Legally backed reverse mortgage lenders can be found at the Department of Housing and Urban Development website or by phoning their official numbers.

Reverse mortgage gives you the ability to remain owner of your home and pay no interests as long as you don’t abandon the house to live elsewhere.

You keep owing more and more as you receive the loan payments and also your ownership of the home keeps declining with the payments. As long as the borrower lives, doesn’t put the house on the market or abandons the house, this loan will never require repayment.

When the mortgage time is up, you will have to pay the amount you owe to the lender. If the house’s value is higher than the amount borrowed, you will be paid the difference. On the other hand, if the value of your home becomes lower than the amount borrowed, the difference will be paid by the Federal Housing Administration Insurance.