Should Your Parents Consider A Reverse Mortgage

Should Your Parents Consider A Reverse Mortgage



Should Your Parents Consider a​ Reverse Mortgage?
Are your parents struggling to​ make ends meet with their retirement income? Many homeowners are taking advantage of​ reverse mortgages as​ a​ means of​ being able to​ live more comfortably during their retirement years. a​ reverse mortgage offers individuals aged 62 or​ older to​ tap into the​ equity in​ their homes as​ a​ means of​ supplementing their monthly incomes.
Getting a​ reverse mortgage does not involve selling the​ home,​ nor does it​ require the​ homeowner to​ take on​ a​ new monthly payment. With a​ reverse mortgage,​ instead of​ the​ homeowner paying the​ lender,​ the​ lender pays the​ homeowner. Reverse mortgages can come in​ very handy for helping with daytoday living expenses,​ as​ well as​ with unexpected and emergency expenses.
Your parents could receive additional income each month with a​ reverse mortgage. Some individuals opt to​ receive their reverse mortgage payments in​ a​ lump sum instead of​ monthly payments,​ and others choose to​ set their funds up so they can simply draw against them as​ needed. a​ reverse mortgage can help with daily living expenses,​ or​ with the​ unexpected such as​ medical bills or​ emergencies such as​ car or​ home repairs.
Reverse mortgages are available for individuals who still have a​ mortgage on​ their homes,​ but are best used in​ situations in​ which a​ homeowner has outright title to​ his or​ her dwelling. When there is​ no prior debt on​ the​ home,​ homeowner is​ able to​ draw against the​ full value of​ their real estate.
Reverse mortgages are still loans,​ and do have to​ be paid back. if​ your parents were to​ move out of​ the​ home,​ sell their home,​ or​ pass away,​ the​ loan would have to​ be repaid in​ full. Assuming the​ home sells for the​ amount owed,​ or​ more,​ the​ loan is​ simply repaid from the​ proceeds. the​ element of​ risk comes in​ here. if​ the​ home sells for less money than is​ owed on​ the​ reverse mortgage,​ alternative arrangements will have to​ be made for repaying the​ remainder of​ the​ loan.
For individuals in​ the​ right situation,​ reverse mortgages are an ideal solution to​ postretirement living. For individuals who plan to​ sell their home within a​ few years,​ it​ may not make financial sense to​ take out a​ reverse mortgage due to​ the​ upfront costs. However,​ if​ you​ are parents are in​ good health and plan to​ stay in​ their home for the​ rest of​ their lives,​ a​ reverse mortgage may be a​ great solution for supplemental income.
Your parents probably worked very hard to​ build equity in​ their home,​ so it​ is​ good to​ know that they have an option to​ put that equity to​ use during their retirement years. the​ decision about a​ whether or​ not a​ reverse mortgage is​ right for your parents lies with them. it​ isn’t your decision,​ but by becoming knowledgeable about how reverse mortgages work,​ you​ can be of​ great assistance to​ them as​ they investigate their options and make their final decision. it​ is​ also a​ good idea to​ get them to​ do some research before speaking to​ a​ mortgage broker or​ bank about their options.




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