What Is A Reverse Home Mortgage And Why It May Be Useful To You

What is​ a​ Reverse Home Mortgage and Why it​ May Be Useful to​ You
Reverse mortgage,​ as​ the​ name suggests enables you​ receive money against equity on​ your home. it​ allows you​ to​ get money,​ without selling your home. However you​ need to​ repay the​ money after your death,​ while you​ sell your home or​ you​ stop living in​ the​ house. Many Americans,​ the​ age of​ 62 and above partly depend on​ reverse mortgage for different financial requirements like healthcare expenses,​ to​ supplement their retirement income or​ to​ pay off their mortgage.
Statutory laws pronounce reverse mortgage process generally taxfree and in​ most cases,​ without income restriction.
Types of​ Reverse Mortgages
Basically,​ there are three types of​ Mortgages
Single Purpose Reverse Mortgages,​ supported by local,​ state agencies or​ nonprofit organizations
They are low cost loans,​ usable for only a​ specific purpose,​ as​ specified by the​ lender. They are available to​ people with low to​ moderate income.
Federally Insured Reverse Mortgages,​ also known as​ Home Equity Conversion Mortgages HECMs,​ backed by US Department of​ Housing and Urban Development HUD
Proprietary Reverse Mortgages offered by different companies
HECMs and proprietary reverse mortgages are costlier than single purpose reverse mortgages.
The value of​ the​ house is​ the​ total repayable cash and taking a​ reverse mortgage loan doesn’t affect your other property or​ the​ property of​ your heirs.
Advantages of​ Reverse Home Mortgage
You can use the​ money you​ receive for any purpose,​ provided you​ don’t take Single Purpose Reverse Mortgage loans. Pay taxes,​ cover insurance costs,​ etc. Fall in​ returns from CDs or​ IRAs force people to​ look for other means of​ income security.
There is​ no time limit for receiving money and you​ continue to​ receive money till you​ sell your property,​ or​ permanently move to​ a​ different house. you​ will never be asked to​ pay more than the​ value of​ your home and at​ the​ end of​ loan,​ your heirs will receive any surplus amount in​ the​ home equity.
However attractive it​ appears,​ a​ reverse mortgage is​ not for everyone,​ especially for very low income people. Such a​ loan can disqualify them from receiving aids,​ like Supplemental Security Income or​ Medicaid.
If you​ are a​ man or​ woman of​ 62 years or​ older,​ who is​ houserich,​ cashpoor,​ you​ can opt for a​ reverse home mortgage. it​ will help you​ manage your cash flow problems,​ as​ and when it​ arises.

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