Seniors deserve to live their final years as they desire. However, many men and women find at this time in their lives they lack the funds to do so. Fortunately, help may be available in the form of a reverse mortgage.
What is a Reverse Mortgage?
Individuals who are 62 years of age or older find they can take out a reverse mortgage to access the equity in their homes. They don’t need to sell their homes or take on additional bills each month to do so, and the funds may be used for any purpose they desire. Some men and women pay off their existing mortgage with the help of the reverse mortgage while others supplement their income. A person may even use the funds for medical bills they have, as there are no restrictions on what they do with this money.
What are some benefits associated with a reverse mortgage? A person can get more information from fellowshiphomeloans.com. However, the following information provides an overview of some benefits associated with this financial product.
When a person takes out a reverse mortgage, they remain the homeowner. The lender does not take ownership of the property. The owner must comply with the terms of the reverse mortgage and properly maintain the property. Furthermore, they must remain up-to-date with their homeowner’s insurance and property taxes. If they do so, they remain the owner until they leave the residence or pass away. Nevertheless, owners must understand what is required of them when it comes to repairs and maintenance, so no problems arise during their time as reverse mortgage holders.
No Monthly Payments
With a reverse mortgage, the homeowner gets paid rather than paying a monthly mortgage payment. Instead of paying the lender, the lender pays the homeowner. This is a unique type of loan in that it doesn’t have to be repaid until the owner sells the residence, moves to a different primary residence, or leaves the home permanently for any reason.
Protection from Housing Market Fluctuations
The housing market fluctuates based on many factors. A reverse mortgage differs from many financial products today, as the federal government insures it. This makes it more secure. When the loan disbursements exceed the home’s value at the time of its sale, the government covers any difference. The proceeds of the home cover the entire amount of the reverse mortgage, so nobody is left with an unexpected bill.
Seniors choose from several disbursement options with a reverse mortgage. Some people choose to receive a monthly payment, while others request a line of credit or upfront payment in full. Discover the advantages and drawbacks of each disbursement option to ensure you select the right one for your needs. The option selected plays a role in the length of time the individual receives the disbursements. If a person chooses a lump sum payment, for example, they only receive one payment. If they request monthly installments, the payments continue until the owner leaves the home.
If you find you lack the funds needed to live the life you desire in your senior years, consider a reverse mortgage. Many people don’t understand how this financial tool works and are missing out on another source of income during their retirement years. Don’t make this mistake. Speak with a lender today to ensure you make the most of the equity you have built up in the home.