What Is A Reverse Mortgage Good For

What is​ a​ Reverse Mortgage Good For?
A home loan that you​ do not have to​ pay back for as​ long as​ you’re alive or​ for as​ long as​ you​ live there? That sounds too good to​ be true,​ but that’s what reverse mortgages do.
A reverse mortgage is​ a​ loan that you​ make where you​ do not have to​ pay back anything for as​ long as​ you​ still possess that property you​ have purchased .​
Reverse mortgages provide you​ with cash which you​ can use for other investments .​
By turning the​ value of​ your home into cash,​ reverse mortgages gives you​ virtually unlimited funds without having to​ move and even without repaying the​ loan every month.
There are several ways to​ give you​ the​ cash from reverse mortgages .​
You can get cash from a​ reverse mortgage all at​ once or​ in​ a​ single lump sum .​
With a​ reverse mortgage,​ you​ can also opt to​ receive a​ regular monthly cash advance.
In addition,​ a​ reverse mortgage can offer you​ cash as​ a​ creditline account .​
This creditline account from a​ reverse mortgage will let you​ get the​ amount of​ money you​ want whenever the​ need arises .​
And if​ none of​ these methods suits you,​ reverse mortgage cash may be given to​ you​ using any combination of​ the​ abovementioned methods.
Whether or​ not you​ want your cash from a​ reverse mortgage be paid to​ you​ in​ lump or​ in​ installment,​ the​ main thing is​ that you​ do not have to​ pay anything back until you​ die,​ sell your home,​ or​ permanently move .​
Reverse mortgages usually cater to​ homeowners who are 62 years old and older.
Reverse Mortgage vs .​
Other Home Loans
In most other loans,​ a​ systematic check on​ your income and assets is​ done in​ order to​ pre-qualify for the​ mortgage .​
This is​ done as​ an​ assurance to​ the​ lender that you​ will be able to​ afford the​ monthly payments tied with a​ loan .​
Since reverse mortgages do not involve any monthly payments,​ you​ not have to​ go through these tedious prequalification procedures .​
Qualifying for a​ reverse mortgage is​ easy and hassle-free .​
There is​ no minimum income required and no monthly repayments .​
And what’s more,​ with a​ reverse mortgage,​ you​ do not stand the​ chance of​ losing your home.
The downside to​ a​ reverse mortgage
In every story,​ there is​ always the​ other side of​ the​ coin .​
While reverse mortgages have their advantages,​ they also have a​ downside .​
As you​ know already,​ reverse mortgages do not require monthly paybacks .​
This means that with reverse mortgages,​ you​ are actually taking out equity from your home and turning it​ into cash .​
This does not bode well for your debt or​ your home equity for that matter.
Here’s how it​ works .​
Other mortgages require a​ person to​ make a​ down payment when buying a​ home .​
As years go on,​ they use their income to​ pay back the​ money they borrowed in​ making the​ purchase .​
This decreases their debt and increases the​ value of​ their home.
With a​ reverse mortgage,​ everything works in​ the​ reverse .​
You have your home .​
You convert its value into cash .​
And then you​ take out that cash every now and then,​ thereby increasing your debt and reducing your home equity.
Of course,​ this is​ not always the​ case with reverse mortgages .​
If your home value grows rapidly or​ you​ only one loan on​ your home,​ there’s every chance that your equity could increase over time.

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