Reverse Mortgage Benefits Points to Ponder
Get the liquid cash you need to maintain your current lifestyle. Reverse mortgages are taken by thousands of seniors every year. They can create a safe way to take care of yourself (and your spouse), while having the financial independence you have worked for all of your life. By acquiring a reverse mortgage, you can live in your home without a monthly mortgage payment for the rest of your life. Additional points to ponder include:
- Money can be used for any purpose: Keep it as a home equity line of credit to limit interest charges or spend however you like.
- You still own your home: A reverse mortgage is just a different kind of home equity loan.
- You generally receive the proceeds of the loan as tax-free cash. It is recommended though to speak with your financial advisor to verify your specific situation.
- The loans are often used to pay off mortgages, pay bills, pay medical bills and make updates to your home
- Reverse Mortgages are not a way for the bank to get your house. You are not selling your home. You are the only person on the title. You retain all ownership.
- Convert your home’s equity into monthly payments to supplement income and maintain your standard of living
- Eliminate Monthly Mortgage-Without the burden of a monthly mortgage payment, you can free up cash to cover other important expenses.
- Did you purchase your home when prices were low or has your home value grown over the years? Use the monthly or lump sum payments from a reverse mortgage loan or the proceeds from a refinance loan to supplement your social security and other income without tapping into your investment portfolio.
- If your current home is fully accessible and you can foreseeably stay there for your lifetime, the reverse mortgage can help fund a more secure retirement.
What are the benefits of a Reverse Mortgage for the children of Seniors?
We understand that the decision to take out a reverse mortgage may be influenced by the children of the homeowner. Here are some benefits:
- After the loan is repaid-the remaining equity belongs to the homeowner.
- Regarding inheritance: When the homeowner dies, their spouses or estates repay the loan. Per the FTC, this sometimes means selling the house in order to generate the needed cash. If the house sells for more than the outstanding loan balance- the leftover balance goes to one’s heirs. If the home sells for less- heirs receive nothing and FHA insurance covers the lender’s shortfall. For this reason, borrowers must pay mortgage insurance premiums on these types of loans.
Advantages vs Standard Home Mortgage
Eliminate your standard home mortgage. A reverse mortgage can be less expensive than a traditional home mortgage or home equity loan. This is due to the fact that with a traditional loan you have to add up all of the monthly payments you will be making over the years and include that figure in your costs. Many seniors who have taken home equity loans are having difficulty making the monthly payments, and they are now taking a reverse mortgage to pay off the equity loan and eliminate those payments.
Why is a Reverse Mortgage Safe?
Start a financial plan that adjusts to your needs. The federal government regulates reverse mortgages. This means that the amount of money available to you and the costs you pay are primarily the same with every lender in the United States.
Trust David J. Blatt
Secure the rising costs of everyday living. Because reverse mortgages are relatively new to many people, there is a lot of conflicting and incorrect information about them. When seniors rely on authoritative sources like AARP®, HUD, and experienced lenders like David J. Blatt, they find that reverse mortgages are actually quite simple, and in many cases, beneficial for someone who is over 62 years old.
David can answer questions to your unique situation.