If you are retired, you may have discovered that your current income is insufficient to meet your living expenses, especially if you have unexpected medical or funeral bills. In many cases, either liquid assets or insurance will be sufficient to meet these needs. But in some cases, neither of these avenues is available. Therefore, in order to meet your financial obligations, you may need to examine an important source of equity that you have probably spent much of your life accumulating the equity in your home. New mortgage products that are now available on the market can be an invaluable source of tax-free income for needy seniors like you. These programs are for seniors aged 62 and older that have either paid off their homes or have very low mortgage balances.
There are two main types of reverse mortgages available to the public: federally insured reverse mortgages backed by HUD, and retail reverse mortgages backed by corporate lenders. These mortgage products quite simply are designed to pay out a portion of your home's equity in cash. This will either take the form of a single, lump-sum payment, a set monthly payment (that continues either for a set period of time or for as long as you own your home) or most commonly as a line of credit. For example, say you are living on a fixed income. Then, a health issue arises that requires monthly bills to be paid, which are not covered by your insurance. If you have no liquid assets set-aside to cover these costs, then you could take out a reverse mortgage on your house and receive a tax-free monthly (or single) payment to match your expenses. Of course, the amount you are eligible for will obviously depend on such factors as the value of your home, current interest rates, your age and local lending limits. A key advantage that these programs offer is that there is no medical underwriting of any kind involved, so any medical conditions that you may have will not prevent you from qualifying. There are also no limitations on how the proceeds from a reverse mortgage can be spent; the funds can be used for anything. If you are looking for an additional source of funds and would like to know more about whether a reverse mortgage is right for you, you can get no obligation quites form reverse mortgage lenders in your area.
Note that as with any mortgage, there are points and other costs associated with the origination of the mortgage. Interest rates for reverse mortgages generally are higher than traditional home mortgages and home equity loans. Additionally, fees and expenses associated with reverse mortgages are also higher than fees typically applied to traditional mortgages – sometimes as high as 4% to 8% of the mortgage loan amount. In addition, while typically there are no taxes on the proceeds of a reverse mortgage, the income or lump sum received could impact eligibility for various state and federal benefits, including Medicaid. Further, depending on the laws of a state, a reverse mortgage may not enjoy the same home-equity protection that would otherwise apply if a homeowner had a health emergency and needed to enter a nursing home. Reverse mortgages should not be used to speculate with home equity.
Before you obtain a reverse mortgage, federal rules require that you have an education session with a government appointed consultant to make sure you understand all of the terms and so that you can ask your questions to an impartial source.
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My grandmother actually got a reverse mortgage on her house and got over $120,000 back!
I was amazed that she could do this, but it's sad to think she did it because she thought she wouldn't be here to pay it back.
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I just started researching the benefits of a reverse mortgage.My in-laws and my parents have both showed interest in them and so I've been looking into it for them.
So far they seem to be a great opportunity
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I never even thought about how a reverse mortage would effect aid from states. Sounds like people should make sure that one does not effect any aid they get before they apply for one.
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I would use caution before implementing a reverse mortgage into my retirement strategy. I think it is very important for people to educate themselves before altering their retirement plans.
Reverse mortgages do look good on paper and in black and white. But if it impacts your eligibility for Medicaid, I would not do it without seriously weighing the options.
Reverse mortgage is a useful estate planning tool that banks and financial institutions ought to offer making available to seniors. It’s a great security for them to ensure the delivery of their pensions in the amounts they thought forthcoming.
When did reverse mortgages come to be? I don't recall hearing about them until just the past few years.
- Heartland Energy Colorado
This sounds scary. If you are getting the funds to cover expenses that you are unable to pay, and the interest rates are high, how are you going to pay this back? Seems to me like you are just digging your hole deeper.
The Money you receive with a reverse mortgage can be used for virtually anything. You can use it for basic necessities, or for luxury items you couldn’t otherwise afford.
Graham, reverse mortgages have been around since 1961, but have recently gained in popularity because of the government safeguards that have been put in place. The federally-insured Home Equity Conversion Mortgage makes a lot of sense for some people and you can learn more about it at this Reverse Mortgage resource.
Also Urnestegg, as long as you stay current on taxes, insurance, and repairs on your home, you will never have to repay these funds as long as you live in the home. This is also what is called a non-recourse loan which also serves as a consumer protection.
I have a blog, which is specialized in sharing information about the reverse mortgage loans. From the previous posts I can see, that reverse mortgages are not familiar to many seniors.
But the formula is simple: you use the money from the equity of your home. This equity you have collected during the days, when your salary=income was better and now, when it is lower, you want to enjoy abóut the same standard of living.
You can do it by taking the reverse mortgage loan. This loan and the interests will be paid back, when you move away from your home, so you do not have any monthly payments. These sums can never be higher than the value of your home. However, if they are, the state will pay the difference. Before you take it, talk with the family and with the experts.
Hi
Great post reverse mortgage is good news for someones and mostly not like this.
Thanks for the post on reverse mortgages. I handled these at my mortgage company fora while and people really have no idea what they're asking about. The more reverse mortgages are talked about, the better it is for the industry!
I am glad to see that there is an established method of raising funds for the elderly which is in their control. Being independent in your later years is very important for your self esteem as we all know it costs money to be looked after and funds from the government might be running lowas our aging population grows every year. Money would be needed for equipment to cater for the elderly and for training for relatives to care for their parents.
Can these type of mortgage products be bundled with other products on a large scale to give real value to the elderly? For example financial institutions combining with healthcare organizations to deliver an overall package is this possible?
There are a number of misunderstandings about reverse mortgages and a lot of seniors are afraid to move ahead with them. I think most of it has to do with a limited number of scams that have been published in the media over the last few years. There is also that "it is too good to be true element" and in general seniors are afraid of being taken advantage of.
It is a great thing that you are publishing information on about reverse mortgages on your blog, since real facts are the main way of combating this misunderstanding.
As reverse mortgages are becoming more acceptable, Ive seen more and more senior inquire about the possibility of possibly doing it themselves.
Reverse mortgages are in use from 60's, but have recently gained in popularity because of the government interference in safeguarding. The Money you receive with a reverse mortgage can be used for virtually anything. You can use it for basic necessities only. Great Post....
Reverse mortgage is better especially in the condition of recession.
Reverse mortgage is a great idea if you own your home outright. The other option is sell your house straight out and then just move into a nice assisted living center or a low maint. apartment. Many times the second option is a much better one...you keep all the value of your house and the bank does not take the value out of what you own. Of course...you can always just run your credit card up forever. When you pass away the card companies end up writing this off. They try and scare relatives into paying them off but that is not legal at all. Not your fault dad went on a spending spree!
Reverse mortgages can be thought of as another avenue that can be explored if the need is there. Times are so tough and being on a fixed income can be difficult if a situation arises that more money is required. Having the option of a reverse mortgage can be a real lifesaver. Although all the factors need to be weighed carefully before considering a reverse mortgage, just knowing it is available can be very helpful.
I was not aware of this type of mortgage. After reading this post I informed my retired parents about this type of program. They weren't aware of it and got in contact with a mortgage broker you is going to meet them to discuss their option. I will have to follow up with them to see if it's to their benefit to take out one of these mortgages.
Reverse mortgages can be valuable. Honestly though, I do not understand why a senior would get a reverse mortgage instead of just selling the house and moving into a retirement home. If they are that old they would be better off in assisted living and they do not have to worry about getting hosed by the loan terms.
I couldn't agree with reverse mortgage, its like digging yourself another hole, with this you might end loosing your property..
I think Reverse mortgage is worth the juice. but interest rates are higher so one should take everything in to consideration before going for it.
A reverse mortgage can be a great idea if other funds are not available for retirement. There will be a lot of baby boomers who don't have enough to retire, but they may have equity in their home, or even own it outright. So tapping this can allow them to stay in their home and maintain the same lifestyle as before.
So what happens when the loan has to be repaid? The house just gets sold?
My mother is thinking of doing a second mortgage in 1 months when she turns 55. The home has a tax lien. How would this impact getting a darn mortgage, if it affects it at all? (possibilities of getting a reverse mortgage)
I think reverse mortgage can be a really good solution for people who invested all the money in their own home and at retirement the money for daily life is not enough.
It may be an option for my parents except my Mom is on Medicaid and I am not sure if they could do both.
If you can't afford your normal living expenses is it really wise to raise your debts with another small mortgage payment every month?
I think them best option would be to sell your home and find something more affordable.
If you can invest the money from the reverse mortgage and make a return great enough to cover the payment and have more left over at the end of the month it is a great idea.
Getting the ownership for home is really attractive for every one with reveres mortgage...
Interesting post. I am based in the UK and I have heard of reverse mortgages but didn't really know what they were. Over here, like everywhere, there are going to be problems as the population lives longer and state aid to this ageing population reduces. We have a system called equity release over here, which sounds similar to reverse mortgages. I think it is important to say that we all need to start putting money aside as young as possible for retirement. The longer we leave it the harder it wll be to guarentee a comfortable post-work income!
Hiya,
Reverse Mortgages are a great idea for senior people, although I am sure the Kids (due to inherit) would have a problem with them.
I mean; so many people pass away and then their house is no use to them.
Great article by the way - it really explains their uses!
Take care, James
there are always few things u can do;
SELL the house- and for the money- stay at the retirement house- or
better one…you keep all the value of your house and the bank does not take the value out of what you own.
this reverse mortgage idea really is interesting!
The Money obtained from reverse mortgage can be used by retired people as a jackpot. Its ver useful
Tell me about it Commercial Storage. My grandfather screwed himself over with a reverse mortgage
In my opinion, a reverse mortgage may be a good idea if you don't have any family members that may benefit later from the equity in your home.
Hmmm...I didn't realize the potential consequences to medicaid and other programs. Thanks for that.
Reverse mortgage is a useful tool that banks and financial institutions ought to offer making available to senior publics.Its advantages is explained clearly.
Was not familiar with reverse mortgages. Great info! Thanks!
As with many things the reverse mortgage is a great mortgage for the right person. There are many misconceptions about the reverse mortgage but in the right situation a reverse mortgage can be a god send. I have had clients who were near foreclosure that not only were able to pay off their mortgage but also received cash back.
Roy Paeth
Chicago First Time Home Buyer
In my experience the cost of a reverse mortgage far exceeds other alternatives such as a refinance or Line of Credit. I think its a well packaged (marketing) product but with a good budget and some discipline managing your own money is a better route.
What do you think of the concept of using the reverse mortgage, or people's experience with it, as a learning tool of what not to do? Wouldn't the reverse mortgage, or need for it, be one of the biggest reasons to keep your home and your home equity separate. The rate of return on equity is zero.
For me, the greatest disadvantage of reverse mortgage is because it is more expensive than traditional home loans. While traditional mortgage lenders start being repaid from the first month after the loan is obtained, reverse mortgage lenders on the other hand, must wait for many, many years for repayment of any kind.
anyway every coin has two sides,
Reverse mortgage can make your life easier, you can get what yor are unable to afford.
But if the interest rates are high, how can you pay back in the end?
maybe that is a question.
I heard, yesterday, that many people have lost their houses by getting a reverse mortgage.
I am not planning on getting one myself, but why would they lose their house before they die?
My aunt took advantage of a reverse mortgage on her mortgage-free home. It really made a big difference in her life, as she was going through a rough time financially. It has its advantages and disadvantages as with most things. I hate the fact that there are quite a bit of fees and other related costs when getting a reverse mortgage. It does not affect any aid, like medicaid, welfare benefits, etc. So my advice would be to thoroughly do some research to see if it would be something that you would benefit from.
The reverse mortgage industry has been plagued over the years by confusion, rife with reports of predatory lenders preying on the elderly. Today, reputable lending institutions require that borrowers receive counseling about the risks and pitfalls before committing to a reverse mortgage.
This is the standard line: It is a time when medical costs are likely to increase, as well as unexpected costs can creep up. Use a reverse mortgage to help yourself to gain the financial security in retirement that you worked so hard to achieve. But i;m ot sure it;s the best way to tap your asset.
One thing I've noticed about reverse mortgages for seniors is high closing costs. Its not uncommon to pay origination fees that are about double what they are for conventional mortgages and mortgage insurance. The interest rates are adjustable...FYI.
Great info on reverse mortgages. I'm in the mortgage business and our company recently started offering these, I think they'll will only get more and more popular as all the baby boomers age.
Reverse mortgage is a useful estate planning tool that banks and financial institutions ought to offer making available to seniors. It’s a great security for them to ensure the delivery of their pensions in the amounts they thought forthcoming.
Are there reverse mortgages that will let the brower past the house to aires, rather tan sell after death
I have worked in the mortgage industry for about 7 years . I think a reverse mortgage can really help out, just make sure you understand how it all works before you sign up.
I work with seniors, and I think one of the biggest things that make reverse mortgages an uncommon part of retirement plans is that they're very untrusting of the idea because they're not familiar with it. Even though the option has been around for quite a while and such, when you try to tell them about something they can do with their finances they haven't heard about before (and they've been around for 60+ years) they're very wary.
Reverse mortgages are a unique financial product that can be completely wrong for some people, but also be very beneficial for others. I think that the only people who should really look into reverse mortgages are those who own real estate, and do not have anyone to give it to after they pass away. Doing a reverse mortgage allows that retiree to use the equity in their home for retirement funds.
How does reverse mortgage affect other facets of income and expense like medical benefits? It seems lovely to my home reverse mortgaged but I'm afraid it might cost me more when I laid out the effects.
I agree with gfonline, the cost of reverse morgage is much higher becuse the borrower has to factor interest chages in future wich is always in favour of buyer
I just started to research reverse mortgages for my parents and this was a good starting point for me. I will be forwarding it to my parents to help them better understand reverse mortgages.
Usually I tend to not force people to learn about their decisions through government programs, but in the case of reverse mortgages, it's a good idea to know what you are getting into. It's possible that you could be making a poor choice for you and your family when taking out a reverse mortgage (and it some cases it may be a good thing).
reverse mortgage is very very good tool anf method to accumulate monney in lterstage of life.
The interest rates are higher so people, intending to do it should take all conditions into consideration before doing it, however I think Reverse mortgage is worth the stretch.
I spent some time a few years ago in television production, and at that time reverse mortgages had not entered mainstream thinking, now that there are some companies involved and advertising has created awareness. A number of our congregation might surely benefit.
I think that reverse mortgages are a great way for people to have access to their assets and get the value from them when they need it. However, that being said, I definitely believe that it is not something that is right for everyone so I am glad that people have to take an education session before they are able to access one.
Reverse mortgage is a useful estate planning tool that banks and financial institutions ought to offer making available to seniors. It’s a great security for them to ensure the delivery of their pensions in the amounts they thought forthcoming.
Sitting down with a government sounds like a really good idea, also sitting down with your financial planner or CPA would not hurt either. There might be any way to go before using the equity in your home.
I think reverse mortgage can be a really good solution for people who invested all the money in their own home and at retirement the money for daily life is not enough. I agree with your post.
There was a recent article in the Wall St Journal that said that the cost associated with reverse mortgages have come down a bit.
I think we should look for best reverse mortgages packages, these are available online and there will be firms in your surrounding area that specialize in providing such services. So this is your chance to complete your lifelong dream and make your life much better in the older days, make them relaxing in one of the most comfortable homes, that you couldn’t afford, but thanks to reverse mortgages they would become the part of your life in a few days.
Interesting post. I've heard of reverse mortgages before and they sound like a solid option if a retiree finds him-/herself in need of money. But this article should also serve as a wake-up call to younger people reading it, which should remind them to start saving ASAP so they don't find themselves forced into using a reverse mortgage.
Great article!
Naturally, when I was a young boy, I lived with my parents. Its amazing how many people who lived in the same road have now since gone, sold their houses and moved to cheaper property and most of them have done so to release equity to raise money to (basically) spend.
I always thought that the same people would live there to the end of their days, but this is truly not the case...
Retirment is a funny thing don't you think - people often move to quieter locations and you sort of realise that the only factor for keeping them near the cities is money and jobs.
Ciao ciao
I'm in a slight state of dissonance with these reverse Mortgages. I do think there a good idea if you are retired and you need some cash because the state social and your pension isn't sufficient enough. However, what if you have children? I think that your investment isn't just for you, it's also for your kids if you do pass on. If the decision on reverse mortgage is to take some of the money back out then fine, but I think your children need some investment from what you had to ensure their secure. Great post though
I believe reverse mortgage could always be a quite great answer for individuals who spent all their cash in their own property and also at retirement life the funds for everyday living is not sufficient. I consent with your article.
Informative post. If you are over 62 and have little or no income but have a home, reverse mortgage can help! Reverse mortgage lenders are informed by FHA on how much they can lend you based on your age and home equity
Reverse mortagages are a last resort and should only be considered if everything else has failed. That said, they are an otion worth considering.
Steve
I’m not a big fan of reverse mortgage, but id I had to do one I would do as much research I you could. Get a second opinion on the deal before you commit. Make sure you understand what you are signing.
I have heard some about the subject of reverse mortgages, and I guess in some situations they may be the best for individuals. I guess it goes against my grain to go back into debt for something that may be completely paid off. I guess for some that the only option.
Yes as a real estate agent I can confirm that a reverse mortgae is a great way to release the equity in your home and provide an income during your retirement.
Instead of these reverse mortgages why not the Grandchildren buy the house from the grand parents that way the equity remains in the family and the grandparents can live in the house rent free untill there time is up
Can you get a second mortgage on a reverse mortgage home
Himmm, I heard of Reverse Mortgage's before. But the question is up to how much a home owner use this mortgage? There should be a limit and qualification. Otherwise if the person pass-away how will the investor get his money back? There are some question marks around this subject...
I dont know why anybody would actually go in on a reverse mortgage. Would it not be better just to sell your home and then buy something cheaper. otherwise you will just be flushing all your equity away
Yes you are absolutely correct reverse mortgages can really help us to fulfill our financial needs the information is really helpful and hope to see more from you thanks for sharing......
I agree with used machinery: just sell your house and buy something cheaper! When you're retired you can live in the country side, where bigger houses are way cheaper!
We have noticed quite an uptick in the prevalence of marketing for Reverse Mortgages here in North Florida. Many seniors can consider this as an avenue of making ends meet especially when some of their other investments may have fallen a bit short but the goal is that they come back in the long run. Housing in general can make for a good investment and might be a facet of a diversified portfolio.
Reverse Mortgage is such a helpful thing to get into. Much like the first commenter my Great Aunt got a similar amount of money back with similar circumstances. It's amazing!
I also agree that this is an option many older people would not want to risk. I think the idea of douwnsizing your current property and therefore realizing some capital would be preferred by many.
Many lenders are asking for Chinese drywall inspections before issuing a reverse mortgage, especially in Florida where the problem huge.
Well clearly this whole reverse mortgage thing has not worked out!
reverse mortgage can I make part of my retirement plan. But I not quite understand about how the correct way to implement it. thank you for this valuable information.
by : Villas in Phuket
Reverse mortgage is a fantastic foreclosure help solution. Many elderly homeowners who have substantial equity in their homes, but are in a financial bind and are having a tough time affording their mortgage, can look into obtaining a reverse mortgage to prevent foreclosure.
It is unfortunate that this solution is not marketed widely as one of the alternatives to foreclosure because it is a viable and dignified solution for elderly homeowners experiencing financial distress.
There must be substantial equity in the property for a reverse mortgage to be approved, but it is definitely worth consulting with a reverse mortgage consultant if you are facing foreclosure and you meet the age requirement.
This is a fantastic discussion on reverse mortgage rates. I want to thank everyone for helping me to better understand it.
I suppose Reverse mortgage is better in the condition of recession.
I agree with Lawrence and with Kanya.
That was very informative. I always thought reverse mortgages and HELOC's were risky for lenders, but when I read that they charge a higher interest, that made a little more sense. With risk, there's cost.
I also didn't know there was a general age range/limit for people who get reverse mortgages. It does make the most sense for retired people to take advantage of to supplement their income since it becomes harder to work as we age.
All in all, I think they are a pretty good idea as long as the market is rising and equity keeps coming. Your post was great. Thanks.
I actually have a friend who did reverse mortgage because her kids already had a house of their own and the really did not had any one to leave the house to. She is very happy with the way it all turned out.
A reverse mortgage can be a good idea for a senior citizen looking to release their equity without having to take out new monthly repayments or sell their home. But the amount borrowed is recovered from the value of the house when it is finally sold and the lender will have first option. So as far as leaving the house to someone there may ulitmately be very little left.
It’s possible that you could be making a poor choice for you and your family when taking out a reverse mortgage
Whoa. I've just learned what is reverse mortgage means. This discussion really helps me understand it. Now, I can say I knew it. I will share it to my parents. Thanks for the information.
Now I know what is Reverse mortgages, but I still doubet can Reverse mortgages turn our home’s equity into spending dollars?
Great Information, I did not know there are two different types of reverse mortgages. I think at the right time with right terms it may help a lot of people who really need it after retirement. Of Course there are pros and cons so I suggest them to learn all the details before deciding. Thanks for sharing.
For many people, a reverse mortgage is a good way to increase their income in retirement - positively affecting their quality of life. The main advantage of reverse mortgages is that they are an extremely flexible financial planning product with very few restrictions on how you receive and use the money.
My Grandmother just did a reverse mortgage. She now has money to do as she please`s in her old age. My brother helped her through the whole process. We did not even no what a reverse mortgage was. I wish you would hear more about it. we had a customer who also purchesed a Warranty with the money she had from a reverse mortgage.
I couldn’t agree with reverse mortgage, its like digging yourself another hole, with this you might end loosing your property. thank you.
I don't see myself doing a reverse mortgage. I would want to leave my children something when I go.
My grandmother wanted to do this when my grandfather passed away. She didn't have the money to pay for the funeral and other bills so she almost got a reverse mortgage. She's glad she didn't now because the financial advisor who almost talked her into it was a scam artist.
Its pretty informative stuff about mortgage and the reverse mortgage is the term which most of the people does not know. Its a cool post.
this reverse mortgage idea really is interesting!
thanks
Reverse mortgage sounds good. I'm pretty glad though that the hardest times are behind us. Things are looking good again in the horizon. I'm hpoing things hold up so the economy can bounce back faster.
Did you know a reverse mortgage can also help borrowers avoid foreclosure? It's true. In difficult times, the reverse mortgage program has become even more popular. By turning home equity into a liquid asset, borrowers can receive cash monthly, in a lump sum, or in a line of credit. The money from the reverse mortgage can be used to pay off existing assets, including a previous mortgage. And some borrowers have successfully used a reverse mortgage to get out of foreclosure and repay their debts.
Reverse mortgage is beneficial for you if you regularly require money for your living without facing any financial scam. For instance, your age is 65 years, it is obvious that you cannot work on your own in this age; you have no additional source of income but your are a owner of luxurious home, in this critical situation reverse mortgage can help you. Reverse mortgage is also helpful in situation when you don't want to leave your home for your children.
If you're a senior looking for a way to supplement your income, a reverse mortgage might be a good option for you. A reverse mortgage allows you to tap into your home equity to receive money either in a lump sum or monthly payout. You remain the owner of your home and you don't have to worry about making payments as long as you continue to live in the home. It might sound too good to be true, but it's possible to use your home to help make your golden years more enjoyable
In a reverse mortgage, also known as a conversion mortgage, the home is used as collateral to get cash. This is similar to a standard mortgage, but with a reverse mortgage the homeowner doesn't need an income to qualify and there are no monthly loan payments. To put it simply: you get cash money against the value of your home equity. What is different compared to the usual mortgage is, that the reverse mortgage loans work in that way, that you do not have to pay anything to the lender monthly. Instead, the lender pays you monthly!
It's important to calculate the cost of a reverse mortgage against what you would gain, because once you enter a reverse mortgage agreement, the mortgage company essentially owns your home.
The money you receive with a reverse mortgage can be used for virtually anything. You can use it for basic necessities, or for other items you couldn’t otherwise afford. Ultimately, reverse mortgages have provided hundreds of thousands of homeowners an improved quality of life in retirement.
The money you receive with a reverse mortgage can be used for virtually anything. You can use it for basic necessities, or for other items you couldn’t otherwise afford. Ultimately, reverse mortgages have provided hundreds of thousands of homeowners an improved quality of life in retirement. You can use the money you receive to pay the loan’s closing costs. Typically closing costs are simply added to your loan’s balance.
I agree with Lawrence and with Kanya. This is a fantastic discussion on reverse mortgage rates.
Reverse Mortage is one of the topic that I want to learn more about.
Reverse mortgage is beneficial for you if you regularly require money for your living without facing any financial
scam. For instance, your age is 65 years, it is obvious that you cannot work on your own in this age; you have no additional source of income
but your are a owner of luxurious home, in this critical situation reverse mortgage can help you.
Reverse mortgage loan advances are not taxable, and generally don’t affect your Social Security or Medicare benefits. You retain the title to your home, and you don’t have to make monthly repayments. The loan must be repaid when the last surviving borrower dies, sells the home, or no longer lives in the home as a principal residence. It can use up all or some of the equity in your home, and leave fewer assets for you and your heirs. Most reverse mortgages have a “non-recourse” clause, which prevents you or your estate from owing more than the value of your home when the loan is repaid.
With a Reverse Mortgage you will never owe more than your home's value at the time the loan is repaid, even if the Reverse Mortgage lenders have paid you more money than the value of the home. This is a particularly interesting advantage if you secure a Reverse Mortgage and then home price declines.
Reverse mortgage is a great idea if you own your home outright. The other option is sell your house straight out and then just move into a nice assisted living center or a low maint. apartment. Many times the second option is a much better one…you keep all the value of your house and the bank does not take the value out of what you own. Of course…you can always just run your credit card up forever. When you pass away the card companies end up writing this off. They try and scare relatives into paying them off but that is not legal at all. Not your fault dad went on a spending spree!
Reverse mortgages guarantee that the homeowner can stay on the property for as long as he or she lives, even if the outstanding loan and interest grow to exceed the value property's value.
Reverse mortgage is a totally secured loan. You will never owe more than the value of your home. Assets will not be taken from you because the loan is already backed by the equity of your home. This is the best loan for seniors who can not qualify for any type of conventional loan. If you are cash poor but rich in home equity, then you can easily get a loan through reverse mortgage.
Take the time to shop among reverse mortgage brokers for the lowest fees; if you have family members or friends who have taken out reverse mortgages, ask them about their experience and whether they are satisfied with the performance of their reverse mortgage broker; if there are senior citizens advocacy groups in your community, find out whether they can recommend any reverse mortgage brokers. Make sure your reverse mortgage broker finds the loan which is right for your needs; you have the right to a retirement as worry-free as you can make it!
A reverse mortgage gives you the ability to use home equity for “extras” such as an annual vacation, new car or home improvements. This flexibility comes from the ability to take out equity as a lump sum, fixed monthly payments, a line of credit, or any combination thereof.
Reverse mortgage loans are unique form of loans designed for seniors. The loans were created to help older seniors’ access steady incomes drawn from the accumulated equity on their homes. Over the years, seniors who have completed mortgage payments on their home or have very little amount pending have continued to accumulate equity in these homes. With a reverse mortgage loan, seniors can now reverse the equity in their homes and get access to much needed funds.
Reverse mortgage gives you the chance to easily pay out the remaining original mortgage on your home. Because the money you get regularly from reverse mortgage does not require repayments, this is your chance to get relief from your monthly troubles. As a retiree, you have probably lost your regular source of income. Reverse mortgage can replace that income so you can live a more comfortable and trouble free life.
This loan can also become a big life saver if you are facing the prospect of homes foreclosure. The lender can pay a lump sum for you. So you will have enough money to pay all your debts to effectively avoid foreclosure. In case you do not need a lump sum, you can choose to be paid monthly so you can have a regular income.
But does a reverse mortgage harm your credit? As I could use the money, I am working my way out of a bad credit line. I don't want to jeopardize my number if it's going to harm me in a bad way.
I am not familiar with reverse mortgages and how can we benefit with it. Thank you for sharing!
I was searching reverse mortgages for my friend and this I found your post and this is very useful information. I will be forward this to my friend to help him better understand reverse mortgages.
A traditional mortgage requires you to make payments and build up equity. But reverse mortgages reduce your equity because you don't need to make monthly payments, and causes your mortgage debt ratio to increase. Your equity gets lower unless your home value appreciates. Thus, reverse mortgages are often known as "rising debt and falling equity" loans.
A reverse mortgage for seniors can help cover essential household bills and make life considerably easier from a financial perspective. However, it is essential to seek guidance from a financial expert because monthly payments are likely to affect a homeowner's eligibility for certain state benefits. It will also reduce or eliminate the family home from that person's estate meaning that less money is available for dissemination to family members. Always consider both the pros and cons before proceeding.
With some careful planning by the senior borrowers, getting the family and/or a trusted financial advisor involved and knowing what to watch for, a reverse mortgage can be a viable retirement tool for many borrowers.It’s just a matter of making sure you put the seniors’ best interest first and knowing what to look out for when doing reverse mortgages for senior homeowners that keep those horror stories from happening in the first place.
A reverse mortgage allows seniors the opportunity to put their homes value to work on their behalf. Rather than making a monthly house payment, a reverse mortgage pays you instead. Even better is that a reverse mortgage is a loan that is borrowed from yourself. You do not have to pay yourself back until you pass away or move from the home.
The personality of the reverse mortgage lender you choose can also influence your transactions. Make sure that you choose a lender that you can establish good communication with, a lender who understands your situation and can respect your decisions. A reverse mortgage lender should have professional commitment to provide you with the best possible service. They should be able to give you the best options there is in the market. They should also make sure that their services are personalized specifically to meet your needs.
Choosing the right reverse mortgage lender will certainly make the processing of your reverse mortgage relatively easy. The right partnership between the borrower and the lender will make it easier for them to secure a good financial future for the borrower.
Getting a reverse mortgage doesn’t necessarily have to be viewed as a last resort but the homeowner should first evaluate if their financial problems can be addressed by reducing costs in the way of lifestyle changes or seeking assistance through community based programs, organizations, or churches.
Thanks for providing such kind of information to help users get correct knowledge.
Interesting retirement information here on your blog. Keep up the good work.
Very interesting info. I hope it works to secure retirement. It is more important to secure future finance to enjoy life's second innings. thanks 🙂