What is a reverse mortgage Ireland?

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A reverse mortgage is a loan for older homeowners that essentially allows them to borrow against the value of their home.

This type of loan is different from the types of loans that many consumers are accustomed to such as mortgages and car loans. When taking out a mortgage or car loan, the borrower is borrowing funds that they do not presently have in order to buy either a home or a car. They then repay that loan over the loan term with interest. With a reverse mortgage, the borrower is essentially borrowing against the equity that has accumulated on the home that they already own so that they can get an influx of cash. The estate then serves as the vehicle of repayment.

Reverse Mortgage Explained

A reverse mortgage serves as a mortgage that is secured against your property. This means that the loan allows older homeowners to borrow a sum of cash with their home being used as the security. 

There are no regular repayments that need to be made with a reverse mortgage, unlike a regular mortgage loan. Instead, the loan is repaid with interest when the home is sold, the borrower passes away, or the borrower stops permanently living in the property. The reverse mortgage grows with time and the interest that is accumulated on the loan is added to the loan balance with each passing month.

Reverse Mortgage Eligibility Requirements

To qualify for a reverse mortgage, you must be a resident of the Republic of Ireland and own a home. Additionally, you will have to meet certain age requirements. If there are two of you applying for the loan jointly, both of you must be residents and meet the age eligibility requirement. Additionally, you are not required to have a regular source of income because there are no required regular repayments. Your home will also need to meet certain eligibility requirements for you to qualify for a reverse mortgage.

The amount that you can borrow with a reverse mortgage is dependent on your age as well as the value of your property. Additionally, there is likely to be a maximum overall loan size that is offered.

With a reverse mortgage, you will keep full ownership of your property, and you can continue living in the home for as long as you choose. This loan can be a great option for older homeowners, especially those who do not have a regular source of income.