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You’ve Worked for Your Home, Now Make It Work for You

By: Leonard H. Franklin

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Many matured Americans have secured reverse mortgages for different reasons as popularity for this financial product grows. Here are a few of those reasons you should be considering.

Reverse mortgages continue their rise in popularity following the beginning of the retirement wave for the Baby Boomer generation, and the trend doesn’t seem to be slowing down. The attraction and demand for these loans are varied among each homeowner. Some homeowners wish to supplement their social security or pension payments with cash; others are using reverse mortgages to avoid potential foreclosure or liens on their property. This article will explore some additional benefits to help you decide if a reverse mortgage is right for you.

A reverse mortgage is a cash loan that is paid to you using the equity you’ve built up in your permanent residence. So instead of you making mortgage payments to the lender, the reverse mortgage lender will now make payments to you. The terms come in many varieties, and you will not be required to give up your home should you default during repayment.

Repayment of your loan will come when you’ve either a) moved out or sold your permanent residence, or b) you’ve passed on. If you sell your permanent residence (reverse mortgages require that you live in the home you’ll be taking the loan out on), the lenders principal balance plus interest will be taken out of the amount you sold the home for.

In the unfortunate and circumstantial second case in which you pass before beginning repayment on the loan, your heirs will be responsible for repayment. Although, as in the first case, your heirs can repay the loan by selling the home and deducting the balance plus interest owed at the time of closing. They can also simply refinance the loan, just like a traditional mortgage. However, it’s comforting to know that HUD defines this loan as non-recourse, meaning your heirs won’t be saddled with any additional debt beyond what the home can sell for.

Eligibility for the reverse mortgage is flexible, but is based on some foundations. Lenders will require that you be at least 62 years old. Your income level is not important because the loan is being granted on the acquired equity in the home itself. You will remain as the owner of the loan and hold the title as such; therefore, it’s important to remember you will still be responsible for paying all of the bills, insurance, and costs associated with living in your home. Here are some other key points:

Reverse mortgage loans should be closely considered as a financial transaction with long-term benefits and expenses. Each time you receive a payment, whether the terms are monthly installments or on a line of credit, the interest will be compounded on top of the principal during the life of the loan. Interest rates are sometimes fixed; sometimes they are variable and can move in directions that can work for or against your favor.

Reverse mortgage loans are non-recourse, meaning the total amount you own at the end of the loan will not exceed the total sale value of the home at the time of repayment.

In addition to age and interest rate, the amount of the loan you qualify for is determined based on how much your home is worth and how much you may still owe on the mortgage Consult a reverse mortgage professional or request a reverse mortgage quote for more details.

Once approved, the terms of the loan come in several flavors. You can choose to receive your loan payments in a single large payment at closing, on a monthly basis, in a line of credit that allows you to take payments anytime, or in any combination of these.

You should also be aware of the safety nets in place for you as a borrower. The loans are federally-insured by the United States Department of Housing and Urban Development (HUD) and can be originated and administered only by companies that are licensed by the state to do so. Further, the government requires you to speak with a HUD approved counselor before closing any reverse mortgage transaction. The reason is to insure that you have been given all of the appropriate and accurate information regarding the loan from someone other than the lender so that you may make educated and unbiased decisions.

Let’s look at some situations in which a senior may be considering a reverse mortgage. If any of the examples that follow this text apply to you, then you owe it to yourself to consult with a reverse mortgage specialist. You can request a free and confidential reverse mortgage quote right from our homepage at www.legacyreversemortgage.com that is tailored to your specific situation. Also be sure to take a minute to use our reverse mortgage calculator to estimate how much you can qualify for today, available at www.legacyreversemortgage.com/calculator.

A senior is still paying a large mortgage payment on the home of their dreams. The fixed rate reverse mortgage pays off mortgage, freeing up all that monthly cash for the senior to stay in the home and significantly improve their standard of living.

A senior couple owns a substantial and almost entire portion of the equity in their home after 28 years of mortgage payments, and with just a few more payments to go, this couple will own the home outright. After consulting with professionals and using the reverse mortgage calculator, the couple decided to take out the loan, pay off the home, and remodel the kitchen, bedrooms, and replace the roof with the cash.

Social security benefits are only a few hundred dollars a month for one senior, and it’s just not enough to cover all the bills. This individual has been forced, on more than one occasion, to choose between buying medicine and food because the money just wasn’t there for both. He chooses a reverse mortgage to be able to comfortably enjoy his future years.

Many years ago, a couple made the promise and commitment to fulfill their dream of traveling across the United States during retirement. To bring their dream to reality, a couple chooses a reverse mortgage to pay for a Winnebago, supplies, and begin planning for their trips and other hobbies.

Article Source: http://depositarticles.com/

With www.legacyreversemortgage.com”>Legacy Reverse Mortgage you can learn about programs to get www.legacyreversemortgage.com/reverse-mortgage-quote”>Reverse mortgage loans. You can also find an effective way to calculate the money available to you with their Reverse Mortgage Calculator.

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