An explanation of reverse mortgages
Seniors can deal with the financial uncertainty they experience by using a reverse mortgage. Retirement can be tough on the financial side, and a reverse mortgage gives them the breathing room they need to enjoy their retirement.
For seniors, the income drops after retirement compared to when they were working. Living and care costs are on the rise which sometimes leaves a very small budget per month. What many seniors do not realize, is the freedom they have to use the equity in their home for more financial space. Plus, a reverse mortgage doesn't even require monthly payments, so they get rid of the monthly payments and receive the proceeds of the reverse mortgage.
A reverse mortgage does not take away ownership of the house. The house still belongs to the senior and they are free to profit from a rise in the home value in the future. The homeowner can pay off the reverse mortgage at any time, or not at all if he so chooses. When the titleholder passes away, the reverse mortgage is paid off first by the proceeds of the sale of the house.
In order to qualify for a reverse mortgage, a senior must be at least 62 years old. There must be at least some equity in the home, in order to provide the collateral for the reverse mortgage. Current income is not important and neither is credit history. Sometimes, there is still a small mortgage left, or there is a lien on the home. Many times, these remaining debts are paid off by the proceeds from the reverse mortgage at closing.
The best thing about a reverse mortgage is that the homeowner is free to spend the money as he sees fit. Many times it's used for home improvement, travel and enjoying retirement by having extra financial possibilities. The amount of the proceeds of the reverse mortgage depends on the age of the senior and the amount of equity in a house. With no monthly payments needed, a reverse mortgage is an ideal way for any senior to supplement income in these slim times.
For seniors, the income drops after retirement compared to when they were working. Living and care costs are on the rise which sometimes leaves a very small budget per month. What many seniors do not realize, is the freedom they have to use the equity in their home for more financial space. Plus, a reverse mortgage doesn't even require monthly payments, so they get rid of the monthly payments and receive the proceeds of the reverse mortgage.
A reverse mortgage does not take away ownership of the house. The house still belongs to the senior and they are free to profit from a rise in the home value in the future. The homeowner can pay off the reverse mortgage at any time, or not at all if he so chooses. When the titleholder passes away, the reverse mortgage is paid off first by the proceeds of the sale of the house.
In order to qualify for a reverse mortgage, a senior must be at least 62 years old. There must be at least some equity in the home, in order to provide the collateral for the reverse mortgage. Current income is not important and neither is credit history. Sometimes, there is still a small mortgage left, or there is a lien on the home. Many times, these remaining debts are paid off by the proceeds from the reverse mortgage at closing.
The best thing about a reverse mortgage is that the homeowner is free to spend the money as he sees fit. Many times it's used for home improvement, travel and enjoying retirement by having extra financial possibilities. The amount of the proceeds of the reverse mortgage depends on the age of the senior and the amount of equity in a house. With no monthly payments needed, a reverse mortgage is an ideal way for any senior to supplement income in these slim times.
About the Author:
Mijnadviseur writes articles about mortgages in English, he also writes articles about hypotheek and hypotheekrente in Dutch.
posted by Credit Counseling at
7:12 AM
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