Many financial planners are now recommending seniors to utilize their home equity that sits idle. The reverse mortgage loan helps for increasing seniors’ cash flow, delaying taking out social security funds, avoiding paying capital gains on homes, and enjoying their life. People’s interest in reverse mortgage loans continues to increase as more seniors are using it and it is more widely known. That knowledge has helped them to put their home equity to work to help them live better as well as retire with peace of mind.
The minimum requirement to be eligible to make use of the equity of seniors’ homes is their age. You have to be 62 or older. Ten thousand people a day turn 62. When you are sixty and above you are most probably on fixed income, and you are not working any more. And when they are on fixed income there is a better chance you end up struggling. Let us say you have a monthly $2,000 retirement income. After paying the monthly mortgage, the remainder is to pay for food, utilities (heat, water, sewer, air conditioning etc) medications, doctor visits, taxes, repairs, gas etc. Can you comfortably live with the cash available? To keep up, you try to cut down on expenses even if they are absolutely necessary, adjust your medications intake, reduce medicine portions and all other ways to survive. How are you going to get all your bills paid?
Today’s reverse mortgage loans are not the reverse mortgages we had in the 1970s, we have now a new and improved version of it. During those old times you have heard horrible stories. Now reverse mortgages are inflation fighters. With the help of reverse mortgages you can travel, take vacations and enjoy your home and retirement lives.
In your younger years you spent a lot of time accumulating wealth- 401k for example, so you can enjoy your retirement years. Many of us worked forty-plus years to create wealth thinking so you can enjoy your golden years. But at the end, you get surprised because your accumulated funds are doing no good, it shrank. This is a scary thing. This is where reverse mortgages can come to rescue. Please be advised that before you jump into reverse mortgage options make sure you make an appointment with a well qualified reverse mortgage lender of your choice, seek advice and take it from there.
The first reverse mortgage was written in 1961. Now reverse mortgages are a different product.
To obtain a reverse mortgage loan you must be 62 or older, own your own home, live in that home, and have equity in the home. You don't have to be a US citizen, but a properly documented permanent resident status will suffice.
Below given are some of the features of the modern version of reverse mortgage:
Minimum age to qualify is 62
You don’t have a monthly mortgage payment to make, you will have improved cash flow
FAA insures reverse mortgages, known as HECM
A spouse can continue to live in the home even after his/her spouse dies
If the heirs inherit a home on which there is a rev mort, they can sell the home and pay off or purchase that home at 95% of its appraised value
The heirs can hand the key to the lender and walk away
Financial planners are now recommending reverse mortgages
Reverse mortgage is a non-recourse loan. This means the balance owed will never be greater than the appraised value of the home
Your reverse mortgage become due and payable if the home is no longer your primary residence, if you fail to pay your property tax, fail to pay your homeowners insurance, and if you fail to maintain your home
P.S. This article is for information purposes only, the author is a Delaware commissioned notary public, specializing in reverse mortgage loan document signing, he is not a mortgage lender, attorney or financial advisor. Those who are seeking expert advice must consult with appropriate professionals.