It is sometimes hard to keep your farm running profitably. It may be costing you too much to keep the farm in top shape while at the same time try to make a profit. If the farm has been in your family for generations, you may not be willing to sell it even if you stand to make a profit. Many farmers today are looking to find lenders for reverse farm mortgages to help them deal with this type of situation.
There are some specific requirements necessary in order to qualify for a reverse farm mortgage. They are basically the same as with any reverse mortgage, primary that the borrower is 62 years old or older and must be a property owner. Once the reverse mortgage is obtained, the owner (borrower) is given funds in a lump sum or as monthly payments and he is not required to give up the property as long as he is still using or living in it.
A reverse farm mortgage is a low-interest loan available only to senior citizens who own their own homes (farms). The equity that has been built up in the home (farm) is used as collateral and the amount of the loan is a percentage of the home’s (farm’s) value. This loan does not have to be repaid until the home or farm is vacated permanently by the owner or until the owner passes away. The estate then has approximately 12 months to repay any balance remaining on the reverse mortgage or has the option of selling the home (farm) to pay off the balance.