Are you at least 62 with significant home equity? A reverse mortgage can mean stability during retirement. Use your home to create a monthly income.
What is a Reverse Mortgage?
Simply put, a reverse mortgage is a low interest loan for seniors that uses their home equity as collateral. The amount of the loan is a percentage of the value of the home. It is determined by a formula that takes into consideration the youngest homeowners age, the current interest rate, and the value of the home.
Advantages for Homeowners
There are several advantages to a reverse mortgage. First, it allows the homeowners to stay in their home permanently. The loan does not have to be paid back until 12 months after the last surviving homeowner either passes away or moves out of the home, and the home can be sold to accomplish this. A second advantage is the mortgage is completely paid off, and no monthly payments are due for as long as the homeowner lives in the house. Homeowners are even eligible to receive payments for emergency situations or a monthly income. A third advantage to a reverse mortgage is the easy qualification. Income and credit scores are not taken into consideration, making it a simple way to get a loan.
Advantages for Heirs
After the last surviving homeowner is gone the heirs inherit the home, and can either keep it or sell it to pay off the balance of the loan. If there is equity left over after the loan is paid the heirs can keep it. If the equity is not enough, no other assets can be touched in order to pay the loan. The lender needs to take a loss.
There are many advantages to a reverse mortgage, find out how it can benefit you and your family.
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