Is a Reverse Mortgage for You?
It is important to understand first what a reverse mortgage is before you decide if it is right for you.
In general, a reverse mortgage is designed for the older homeowner who has a significant amount of equity built up in their homes and they are interested in utilizing the equity to supplement their retirement income. T
Typically the lender will take money from the equity in the property and make a monthly annuity payment. Otherwise, you can receive a line of credit, or in some cases, get a lump sum payment.
It is also important to note that the borrower is still responsible for the property taxes, insurance and will be charged interest.
The difference with a reverse mortgage you are not making monthly payments and the balance of the loan goes up instead of diminishing as it would with a traditional mortgage.
As with all loans, your reverse mortgage eventually will need to get paid. The loan becomes due and is paid off when you sell your home or pass away.
Reverse mortgages are structured so that the amount owed will not exceed the value of the home. In the event, you sell the home or pass away and the value of the home is more than the amount owed to the reverse mortgage lender, you or your estate will receive the difference.
A reverse mortgage is a great option if…
- You would like to supplement your fixed retirement income.
- You would like to get a home equity line of credit (HELOC) but are unable to qualify for a traditional HELOC.
- You intend on residing at the property and have no intention of moving anytime soon.
- You would like to use the equity in your home as part of your retirement planning strategy.
- It can be a way to pay off your existing traditional mortgage.
- You would like to have a credit line to cover unexpected expenses.
If you are interested in exploring the benefits of obtaining a Reverse Mortgage, contact one of our loan professionals and would be happy to explain and discuss your options.
Contact us at 401-583-4150!
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