How a Reverse Mortgage Works?Retirement may be right around the corner or you may have already retired, and wonder how you can continue to afford your current lifestyle. A reverse mortgage can be one of those safe and secure means that will ensure that you and your spouse or loved one will not struggle to meet continuing financial and life obligations. In fact a reverse mortgage will allow you the ability to use your ownership value in your residence and convert it into a usable credit line or monthly income, if you so choose. The great thing about it, is that this stream of income is tax-free for you! A reverse mortgage is essentially an equity release loan.
How Safe are Reverse Mortgages
The reverse mortgage program is safe and has been in existence since 1987. It was created to allow homeowners who are over the age of 62 the ability to have more usable income. You do not have to worry about having to lose your home, which relieves you of that particular worry. You will not lose title to your home or have to be concerned about making those bothersome monthly mortgage payments, as long you stay in your home.
Is It Free To Use?
While the reverse mortgage program is not free, there are no substantial fees or out of pocket surprises. The fees are somewhat nominal and as you apply you will see that they are fully disclosed to you. One of the advantages for you is having the ability to use it as a workable financial planning tool. This comes in handy especially when you are attempting to rid yourself of mounting debt problems which could force you to sell assets like your own home. It is also important to understand that your reverse mortgage is not tied to you or your spouse's income, as it might be if you were obtaining a traditional type of mortgage.
Qualifications to Apply
The qualifications for a reverse mortgage are truly quite simple. You must be at least 62 years old and the homeowner and have enough equity in your home to borrow against. If you possess a mortgage balance that is small enough to be taken care of at the closing with money from the reverse mortgage loan, you can also qualify for a reverse mortgage in that manner. Before you proceed in filling out the application, you are legally required to obtain free or at minimum cost, consumer information regarding the load process. In addition, even if your home was not purchased using an insured mortgage through FHA, you will still qualify for a reverse mortgage.
Other Housing Alternativess
If the idea of obtaining a reverse mortgage is not the right fit for you, and you simply would like to consider other housing alternatives, then you might consider a few like life-care communities, senior housing, assisted living or retirement communities. There are a few others also, that allow you to be as creative with your housing options as you would like and still maintain your housing and lifestyle independence.