Reverse Mortgage Benefits

If you own your home, are 62 years old and have a lot of equity in your home you can easily qualify for a reverse mortgage. Retirement can be tough financially, however,reverse mortgage benefits,maybe is for you, if you find yourself trying to live on a lot less money than when you were working.

Reverse Mortgage Benefits

What Is A Reverse Mortgage?

If this is your situation then talk to your bank about converting the equity in your home into cash.

You will no longer have to make payments to the bank or mortgage company, they will make payments to you. If that is the way you have set it up. You have the choice of taking the money in one lump sum, as a line of credit, or receiving monthly payments.

Make your retirement everything you thought it could be and talk to your lender about a reverse mortgage. You can also choose to receive monthly payments and have an amount set aside as a line of credit to use for the upkeep of the home.

Reverse Mortgage Benefits

No Need To Make Repayments!

The difference between this and a traditional mortgage is the loan does need to be repaid until you, as the homeowner, do not live in the home anymore. You can use the money for anything you want or need.

There are no income limits to be eligible and like I said all you need to qualify is to be 62 and have plenty of equity in your home.

Other requirements are you must continue to live in the home as your primary residence. The money can be used to pay off the original mortgage if there are any payments left to be made.

You, the homeowner, must keep taxes and insurance on the home and do normal upkeep of the home.

Your single family home is not the only type of home that can qualify for this type of loan. If you live in a multiple unit dwelling and live in one of the units this can qualify, too.

Reverse Mortgage Benefits

Manufactured homes and approved condos can also qualify as long as they meet FHA and HUD requirements.

The loan will come with fees like origination fees and closing costs so it would be to your benefit to shop around for the best rates to keep as much money in your pocket as possible.

Only when you sell your home or can no longer live in it will the loan have to be repaid. You will also have to repay the interest that has accrued.

If there is any equity remaining after the repayment of the loan that money goes to you or your heirs in the case of your death.

The amount of a reverse mortgage depends on how old you are and the current interest rates.

To arrive at a fair number your house is appraised and that appraisal is then compared to the FHA mortgage limits in your county and the amount you are able to borrow is the lesser of the two. As your age increases so does the amount of cash you qualify for.

FHA Reverse Mortgage May Be Just The Ticket

You had it all planned out, just when you were going to retire and how much money you were going to have to do it with.

Now with everything and everyone losing money instead of making money you are worried that you may not have enough money to live on at all. Look into getting an FHA reverse mortgage.

If you have owned your home for the last 30 years or so and have built up quite a bit of equity and are at least 62 years old you can qualify for an FHA reverse mortgage.

Using the equity in your home can help with anything you need it for. The possibilities are endless, medical expenses, investing, vacations, fixing the old place up or anything else you can think of.

If you do your research and find that this type of situation will be to your benefit then check out two or three different lenders that offer reverse mortgage packages and see if you can find one that fits your needs.

Reverse Mortgage Benefits

To Qualify,Your Home Needs To Be Paid Off,Or A Small Balance Owing

The criteria for being eligible to receive this type of loan, in addition to being 62 and having the equity, are continually residing in the home, having the home be your only residence, and agreeing to pay the insurance and the property taxes on the home.

Your home also must be completely paid off or be very nearly so. The FHA will take into consideration homes that have very small balances left on the original mortgage if need be.

It is mandatory that homeowners attend an educational session hosted by the FHA to learn about reverse mortgages, other loan alternatives and any and all financial pros and cons of opting for a reverse mortgage.

You will find out about loan limits and that they are based on several things like your age, your home’s value and current market trends.

This educational session is of course offered before you agree to sign any loan papers or anything so you can then make an informed decision and even talk to family members before making your decision.

Reverse Mortgage Benefits

FHA Will Handle Everything

The FHA will take care of selling your home when you are no longer living in it, either by moving or your death and any leftover equity will be given back to you or will become part of your estate.

Personally, I do not think there is any reason anyone age 62 or older with a home that is paid off would not elect to have a reverse mortgage. You could benefit so many ways and not have to worry about how you will afford being retired.

You can use the money any way you like and still have enough money to live on year after year after you retire.

You can choose to take your money as a lump sum payment or as a line of equity or as monthly payments. You can combine the line of credit and monthly payments, too. that way you can keep some money in reserve to use as you need it to fix up the old homestead.

An FHA reverse mortgage may help you stay in your home a lot longer than you had intended after retirement.

Jumbo Reverse Mortgage Puts Your Equity To Work For You

A jumbo reverse mortgage is a loan available to seniors 62 years or older with high value homes. Not federally insured like the HECM mortgages the jumbo mortgages allow you to get a lot more cash out of the equity in your home.

You no longer have to make monthly mortgage payments, you get the monthly payment to use any way you would like.

With a jumbo reverse mortgage you can turn your home’s equity into cash. You can pay the closing costs and other lender’s fees with the cash you receive and you get to keep the title to your home. You must live in the home and continue to be responsible for property taxes, insurance and maintenance of the property.

Reverse Mortgage Benefits

This type of mortgage has not been around forever and when they first came on the market they had extremely high interest rates so they were not very popular.

Eventually they became more popular and the interest rates came down so more people with high-value homes thought that this type of mortgage was something they might like to have.

Then the housing bubble burst and basically the bottom fell out of the market and more and more people began losing their homes than could take out this type of loan.

Interest rates were still higher than for a traditional loan and borrowers just could not see themselves clear to pay that kind of interest.

If you have this type of loan then the fact that your loan is secured by your home and the housing values are still declining then if you do the math, the amount of interest works out to be even higher.

You can ask but your bank is laughing all the way to the bank and probably will not adjust their rate of interest.

This type of mortgage is a great way for seniors to increase their retirement income and pay off existing debt. The money can help pay property taxes and insurance on time and in full and can even get some retirement investments started for the long haul. Being retired does not have to be synonymous with ‘being in the poor house’.

Reverse Mortgage Benefits

Since this type of loan does not have the same protection as an FHA HECM loan you must be sure you can trust the bank or lender who holds the note on the loan.

Research a couple of different lenders and then make an informed decision. Get everything in writing especially as to when you will receive your money and if you are leery of the continuity of monthly payments then ask to receive your money as one lump sum.

You have worked hard to get where you are and the last thing you need is to have a not-so-reputable financial institution come along and stick it to you.

When you do your research, take notes, then you can ask pertinent questions and will know without a doubt if the lender you choose knows the market and all the ins and outs, ups and downs. It only makes sense to work with someone who is an expert.

 

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