Have you heard the term reverse mortgage and wondered if it was right for you? Many people haven’t heard about reverse mortgages or have found the information and sources of valid information are hard to come by.
Is a Reverse Mortgage Right For you?
What is a reverse mortgage?
A reverse mortgage program allows homeowners the ability to use some of the equity in their home to receive cash that is tax-free without having to make monthly payments on it. This nationwide program is Government-Insured by the Federal Housing Administration (FHA) which insures it to be a safe program.
In the 1970’s several banks tried reverse style mortgages and in 1987 the US House and Urban Developement (HUD) started a trial program. Home Equity Conversion Mortgage (HECM) was then signed into law in 1988 allowing homeowners the ability to obtain equity in their home in a safe way; so that they are able to better enjoy their retirement. Source: Reverse.Mortgage Learning Center
Can just anyone get a reverse mortgage?
No, here are the main requirements:
- Must be 62 years of age or older
- You must live in the home you’re wanting to draw the equity out of as your primary residence
- The home you’re wanting the reverse mortgage on must be a single family home, manufactured homes meeting certain criteria, townhouses or two – four-unit owner-occupied home
- HUD-approved counseling session attendance
- Pay property taxes and homeowners insurance
Is a Reverse Mortgage right for you?
Reverse Mortgages can be the perfect solution for some homeowners and not a good idea for others. Taking equity out with a reverse mortgage is not right for everyone. If you are working with a good lender they will be honest with you and explain all the pros and cons.
Are you or someone you know a borrower that is wanting a short-term loan? If this is your situation then there are better types of financing that will work just right for your circumstances. A reverse mortgage loan can require certain insurances you weren’t needing before. There are origination and 3rd party fees that will need to be financed. If this is a short-term loan having these extra costs for the short-term is not very practical.
Are you or someone you know planning on being in your home for many years to come. Will having extra income and/or cash help you to stay in your home and enjoy your retirement to its fullest? Then a reverse mortgage (Home Equity Conversion Mortgage) might be a wonderful opportunity for you.
Anytime you are looking to make a big decision in your life, especially when it comes to finances, it’s vital to educate yourself and research every possibility out there. Dig deep and ask questions. There are so many resources out there where you can find out if a Reverse Mortgage is Right for you. Find the answers you’re looking for Source: NRMLA upfront Education
There are many different guidelines and a tremendous amount to consider when thinking of a Reverse Mortgage.
Have you heard of HECM or Reverse Mortgage? Would this be a useful resource for you and your family?