What Can I Get From A Reverse Mortgage?
A lot of older Americans are converting the equity in their homes into cash, by using a type of loan called a reverse mortgage. The money from a reverse mortgage can provide seniors with the financial freedom they need to fully enjoy their retirement years.
The reverse mortgage got its name because the payment stream is “reversed.” Instead of making monthly payments to a lender, a lender makes payments to you. This money can be used for anything you choose.
To qualify for a reverse mortgage you must own your own home and be at least 62. You may even be eligible for a reverse mortgage if you still owe money on a first or second mortgage. And there are no income or medical requirements to qualify.
You can choose how to receive the money from a reverse mortgage. You can choose all at once, fixed monthly payments, a line of credit or a combination of these. The most popular option – chosen by more than 60 percent of borrowers – is the line of credit, which allows you to draw on the loan proceeds, at any time.
The size of the reverse mortgage that you can get varies depending on your age at the time you apply for the loan, the type of reverse mortgage you choose, the value of your home, current interest rates, and where you live can also play a factor.
On average, the older you are and the less you owe on your home, the larger the reverse mortgage can be.
No payments are due on a reverse mortgage while it is outstanding. The loan becomes due and payable when you cease to occupy your home as a primary residence. This can occur if you pass away, sell the home, or permanently move out.
You do not have to sell your home in order to pay off the loan. You (or your heirs) can pay off the reverse mortgage and keep the home. (This can easily be accomplished with a life insurance policy.)
The money provided to you from a reverse mortgage is tax-free, and does not affect regular Social Security or Medicare benefits. However, the funds received from a reverse mortgage may affect your eligibility for certain kinds of government assistance, such as Medicaid or state assistance programs.
These are just some of the benefits you will receive from a reverse mortgage. Contact me and I will refer you to a trusted partner who is an expert for more information and to see if a reverse mortgage is right for you.