If you are a senior considering a reverse mortgage to boost your income there are several things you need to know. Here is all you need to know about reverse mortgages so you will be able to make an informed decision if this loan is right for you.
If you are considering a reverse mortgage you need to learn the facts before deciding if a reverse mortgage is right for you. There are many misconceptions regarding reverse mortgages. Here are the basics you need to know.
What are Reverse Mortgages?
A reverse mortgage is a loan written by a private lender that is insured by the government. To qualify you must be a senior age 62 or older and have sufficient equity in your home. Reverse mortgages pay as long as you are living in your home. If you sell the home or pass away the balance you were paid becomes due. The home will need to be refinanced or sold to pay back the reverse mortgage.
Reverse mortgages were created to help senior citizens pay for the cost of living. You can receive cash from your reverse mortgage all at once or in monthly installments from the lender.
The downside of taking out a reverse mortgage is that you are tapping the equity in your home to pay for living expenses. If you decide to move and sell your home you will be required to pay back the loan. The high costs associated with securing this loan could negate any potential benefits if you sell the home during the first five years.
The best uses for a reverse mortgage are to cover medical expenses and day to day expenses. As long as you are planning to stay in your home using a reverse mortgage is an excellent way to supplement your cash flow.
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Louie Latour is a mortgage professional and the owner of RefiAdvisor.com, a mortgage resource site offering a free gift for homeowners: "Mortgage Refinance: What You Need to Know." This guidebook helps homeowners avoid common mortgage mistakes and predatory lending practices.
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