If you are thinking of getting a reverse
mortgage loan, you need to know its in and out first before submitting an
application.
Reverse Mortgage Benefits
Access To Cash
By having a reverse mortgage loan, you will be able to
access your home equity without having to sell your house. These funds could
provide you with the extra money you need during your retirement years to pay
off your mounting debts, to maintain your way of living, and to take care of
unexpected expenses.
No Need To Pay Monthly Mortgage
Just like a reverse
mortgage Greenville, the home equity loan will borrow against the equity of
your home. However, with a home equity loan, you need to make monthly payments,
which will cut into the amount you have left to spend. But with a reverse
mortgage, you do not need to make monthly payments. The loan just needs to be
repaid when you sell your home, pass away, or move out and it is usually paid
for with the money from the proceeds of your home. You don’t need to pay off the
interest or loan balance before then.
Maintain Ownership of Your Home
You are still the owner of your house after getting a reverse
mortgage loan. The lender will not get the title or the right to sell your
home as long as you continue to pay the housing costs, including the homeowners
insurance and property taxes. The home will still be yours until you pass away
or move out. Even when you move out, you will still have the option to pay off
the loan to keep your property.
Flexible Payment Options
You will have different methods of borrowing through a
reverse mortgage like a line of credit, a lump sum, or a lifetime payment. You
could switch from one payment option to another during the loan.
Medicare and Social Security Remains Unaffected
If you get money from a reverse mortgage, it will count as a
loan and not as your income. Consequently, your Medicare and Social Security won’t be
effected.
Reverse Mortgage Drawbacks
Fees
Reverse
mortgage lenders often charge several fees to close on as well as maintain
a reverse mortgage. Although you don’t need to pay most of the fees until you
decide to move out of your house, you would receive less cash overall compared
to selling the house outright.
Interest
Since a reverse mortgage is a loan, an interest will be
charged on the amount that you will take out. Although you don’t have to pay
the loan as long as your home remains as your primary residence, this will
reduce the amount you or the heirs will get once the house is sold.
No Annual Tax Deduction
The interest on the reverse
mortgage isn’t tax deductible. Since you don’t need to make payments on the
interest as long as you live in your house, it can’t be taken out every year
however, it will instead build up on the mortgage balance. The interest will
just be deductible if the reverse mortgage loan is settled either fully or
partially.
Loan Repayment
In case you live somewhere else aside from your house, you
have to repay the reverse mortgage. Your loan will be due once you live in
another house for nonmedical reasons for most time of the year. Apart from
that, once you move out due to medical purposes, like to an assisted living
facility, and you are out of your house for over 12 months, you have to repay
your loan. This could force you to settle the reverse mortgage loan much
earlier than expected.
Additional Housing Costs
Even though you do not have to make loan payments on this
type of loan, you still have to cover other types of housing costs, like housing
association dues, maintenance, and taxes. In case you fail to follow these
payments, the lender could foreclose on your house.
Smaller Inheritance
A reverse mortgage loan could decrease the inheritance for
your heirs because it cuts down the equity in your house. In case your heirs
put your home in the market following your death, the proceeds will be used to
pay off the reverse mortgage loan and the remaining ones will be given back to
your heirs.
Reverse Mortgage Eligibility Requirements
Eligibility would vary based on the kind of loan as well as the
lender. HECMs have set these
requirements.
1.
You must be at least 62 years old.
2.
Your property must be your primary home.
3.
Your house should be paid off or should have a
low mortgage balance.
4.
You should be able to cover future housing
costs.
5.
You shouldn’t have any delinquent federal debt.
6.
You should meet the property requirements.
If you’re married, you as well as your spouse must be listed
as the coborrowers of the reverse mortgage loan so that in case one dies, or
need to move out for medical reason, the other one could continue living in the
home and get money from the reverse mortgage.
However, this might not be possible in case one spouse is
below 62 years old, which is the minimum eligible age to take out a reverse
mortgage. When this happens, only the spouse who is at least 62 years old could
be listed as a borrower.
Call Reverse Mortgage Specialist if you are interested in this kind of loan.
David Stacey
Reverse Mortgage Specialist
Greenville, SC 29607
864 920 2733
http://reversemortgagegreenvillesc.com/
