Considering a Reverse Mortgage
Those senior homeowners who are approaching retirement may consider a reverse mortgage to receive additional income. Pensions, retirement plans, and stocks have suffered a great loss, leaving many older citizens in a weak financial state of affairs. A reverse mortgage is a feasible means of gaining supplemental income by using the equity that has accrued over years of making loan payments.
Qualifying Information for Homeowners
Senior homeowners who are at least 62 years old may qualify for a reverse mortgage. This type of loan is based on the amount of equity that has accrued in the home. In order to be considered for this loan, the home should be mortgage free or have a minimal balance left on the loan. There are no qualifying credit score or income amount for the homeowners to be approved for a reverse mortgage. The money received from this loan is tax free and is not considered income and does not need to be claimed on a tax return.
Making the Reverse Mortgage Decision
Most single family homes, condominiums, 1-4 multi-family units where one unit is occupied by the borrower, and mobile homes are acceptable reverse mortgage dwellings. Maintaining the home remains the responsibility of the homeowners, and insurance and property taxes must be current. Routine property maintenance is also the responsibility of the homeowners until the reverse mortgage agreement has ended. Seniors, who are not financially prepared to fund retirement, may consider a reverse mortgage to increase income. The loan may be paid to the homeowners in monthly payments, through the establishment of a line of credit, or one lump sum.
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