An explanation of reverse mortgages
Using a reverse mortgage to deal with the financial uncertainty after retirement is more and more common these days. Many seniors are thankfully using a reverse mortgages to put the equity they've built up into their homes to good use. Retirement is not always easy financially and a reverse mortgage can give seniors the breathing room they need.
Compared to when they were working, income is low in retirement for seniors. The costs of living and care are rising constantly, which makes for a small budget per month. Many seniors do not realize that they are free to use the equity in their house to enjoy retirement, without even making monthly payments on a reverse mortgage. The equity can be turned into cash so there is no monthly payment and more financial space.
A reverse mortgage does not take away ownership of the house. The house still belongs to the senior and they are free to profit from a rise in the home value in the future. The homeowner can pay off the reverse mortgage at any time, or not at all if he so chooses. When the titleholder passes away, the reverse mortgage is paid off first by the proceeds of the sale of the house.
To be qualified for a reverse mortgage, a homeowner must have at least some equity in the home and be at least 62 years old. The equity in the house provides the necessary collateral for the reverse mortgage. The credit history and income statements are not important for the reverse mortgage. If there is a mortgage or lien left on the house, these can be paid off by the proceeds of a reverse mortgage at closing time.
The best thing about a reverse mortgage is that the homeowner is free to spend the money as he sees fit. Many times it's used for home improvement, travel and enjoying retirement by having extra financial possibilities. The amount of the proceeds of the reverse mortgage depends on the age of the senior and the amount of equity in a house. With no monthly payments needed, a reverse mortgage is an ideal way for any senior to supplement income in these slim times.
Compared to when they were working, income is low in retirement for seniors. The costs of living and care are rising constantly, which makes for a small budget per month. Many seniors do not realize that they are free to use the equity in their house to enjoy retirement, without even making monthly payments on a reverse mortgage. The equity can be turned into cash so there is no monthly payment and more financial space.
A reverse mortgage does not take away ownership of the house. The house still belongs to the senior and they are free to profit from a rise in the home value in the future. The homeowner can pay off the reverse mortgage at any time, or not at all if he so chooses. When the titleholder passes away, the reverse mortgage is paid off first by the proceeds of the sale of the house.
To be qualified for a reverse mortgage, a homeowner must have at least some equity in the home and be at least 62 years old. The equity in the house provides the necessary collateral for the reverse mortgage. The credit history and income statements are not important for the reverse mortgage. If there is a mortgage or lien left on the house, these can be paid off by the proceeds of a reverse mortgage at closing time.
The best thing about a reverse mortgage is that the homeowner is free to spend the money as he sees fit. Many times it's used for home improvement, travel and enjoying retirement by having extra financial possibilities. The amount of the proceeds of the reverse mortgage depends on the age of the senior and the amount of equity in a house. With no monthly payments needed, a reverse mortgage is an ideal way for any senior to supplement income in these slim times.
About the Author:
Mijnadviseur writes articles about mortgages in English, he also writes articles about hypotheek and hypotheekrente in Dutch.
posted by Debt Consolidation Loan at
7:13 AM
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