Reverse mortgages: A useful financial tool
Reverse mortgages can be a useful financial tool. This type of mortgage provides an opportunity for St. George homeowners to use their home’s equity as cash. For some people, a reverse mortgage can be the ideal financial solution to help with rising healthcare expenses, reduce or eliminate debts and living costs, assist your family with unpaid bills in the event of your death or make home improvements that can increase the value of your home.
There are several advantages to taking out a reverse mortgage.
- Reverse mortgages do not require monthly mortgage payments. This can free up some cash for people who are on a fixed income.
- You can use the money from a reverse mortgage for anything you want; there are no restrictions. You can use it to pay off debts, make home improvements or anything else you want.
- Reverse mortgages do not have to be repaid until the borrower dies or sells the home. This gives homeowners the peace of mind of knowing that they will not have to worry about repaying the loan as long as they live in their home.
While reverse mortgages have no credit or income requirements other than the borrower must demonstrate a financial ability to pay ongoing property expenses, to be eligible for a reverse mortgage, a borrower must be at least 62 year of age. The ability to pay ongoing property expenses includes a cash flow to pay taxes and insurance. Borrowers must occupy the property as their primary residence and either own their property outright or have only a small mortgage balance. They must not be delinquent on their mortgage or have any federal debt.
Overall, reverse mortgages can be a great way for seniors to improve their financial situation in retirement. Perhaps more importantly, a reverse mortgage can offer a viable plan for St. George homeowners to stay in the home they love and have worked hard for while also allowing them to enjoy retirement.
Since reverse mortgages are much different than traditional mortgage loans, borrowers must meet with a counselor from an independent government-approved housing counseling agency before applying for one. There are some important things to keep in mind as you are considering this option. Make sure you understand all of the terms and conditions before you sign any paperwork. Once you know it’s the right choice, it’s important to choose a lender that is experienced in these types of loans. That’s 1st Rate Mortgage! Whether you have already made a decision or have some general questions about reverse mortgages (or any others), contact us today to learn more.
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.