For the last thirty to forty years, you have continually invested your hard-earned money into your home. Even when times were tough and you were raising children and then putting them through college, you still continued to put money into your home. Not necessarily just from mortgage payments, but many seniors have upgraded their homes, renovated, and of course maintained it.
Throughout the years of making all those payments you dreamed of the day when the American dream would be realized with true home ownership-owning your home with no mortgage payments! What would you do then? Vacation wherever you want, whenever you want? Visit family?
The question then comes to mind, can I really afford retirement?
Many baby boomers are struggling with retirement. They want to retire, in fact, they need to retire. However, their just isn’t enough money left over at the end of each month to live, let alone to do the things you wanted to do in retirement.
You’ve worked so hard and done everything right. The biggest asset you own is your home! Should you get another mortgage on the home so you can afford to do the things you want to do? Many seniors cannot qualify for traditional mortgage so this isn’t an option.
However, a reverse mortgage could be the answer. First of all, a senior needs to be at least 62 years old to qualify. You would be taking a portion of your equity to use as cash.
Knowing the advantages and disadvantages of a reverse mortgage can help seniors determine if this is the right loan for them. I wanted to highlight some of the advantages. To read the disadvantages click HERE.
- The ability to stay in the home you love without having to worry about downsizing.
- You retain ownership of the home. Your name remains on title as with any other loan. As long as you pay your property taxes and homeowners insurance and keep the property well maintained the bank will never foreclose.
- The reverse mortgage or Home Equity Conversion Loan (HECM) is a FHA loan insured by them. The Federal Housing Authority insures that you will never owe more than your home is worth.
- The reverse mortgage funds can be used however you want. You might want to keep it in the line of credit, make some home repairs or upgrades, or anything else you would like.
- As long as you or your spouse live in the home, you will not need to make any mortgage payments. The loan repayment is deferred until the last borrowing senior leaves the home.
- This is a non-recourse loan. What this means to the borrower is that the bank can not take any other assets of the borrower to pay the loan. The home is the only collateral.
- Some of the costs, such as the Mortgage Insurance Premium or MIP can be rolled into the loan. The MIP is a federal cost from FHA that insures your loan and protects you.
If you have any questions about Reverse Mortgages, please feel free to contact me directly at 559-994-3692.
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