“I no longer have a substantial mortgage payment coming out of my budget each month. I was able to pay off some nagging bills, and now I have funds in the bank, which feels really good. I’m so glad I did a reverse mortgage! Life seems brighter now that I am not stressed by my finances.” ~ JS, Aurora
A reverse mortgage is a government insured loan that allows homeowners, one of whom must be 62 or older, to convert the substantial equity in their home into non-taxable income.
The amount of money that will be available is determined by the appraised value of your home, the amount of equity in the home and the age of the homeowners.
You may use the funds in any way you choose. Many people opt for monthly checks that help with the cost of living. Others use the money to cover health care costs, travel, or to update their home. You may also receive a lump sum payment and/or have a line of credit to access at any time in the future. You will not have a mortgage payment with a reverse mortgage, and no one owns the home but you. You can will the property to your heirs.
There is no loan repayment until both homeowners no longer live in the home. You will never owe more than the home is worth because the loan is insured by the government if the loan balance is more than the value of the house when it is time to repay the reverse mortgage. Neither you nor your heirs will be saddled with additional debt.
In situations where the need for extra cash for retirement is important, a reverse mortgage may be a good solution. One of the requirements for a reverse mortgage is that the home owner(s) attend a counseling session with an approved non-profit organization to examine the pros and cons.
They will explain such things as costs, tax implications, payment options, benefits and drawbacks. A certificate will be issued to you upon completion. You will be asked to provide it to your Reverse Mortgage Specialist to be submitted with the other loan documents should you decide a reverse mortgage is right for you.
Contact your Reverse Mortgage Specialist for additional information and a proposal created just for you.
This article first appeared in My Primetime News, January 2, 2016.
Tags: reverse mortgage