If you are a senior considering a reverse mortgage to boost your
income there are several things you need to know. Here is all you
need to know about reverse mortgages so you will be able to make an
informed decision if this loan is right for you.
If you are
considering a reverse mortgage you need to learn the facts before
deciding if a reverse mortgage is right for you. There are many
misconceptions regarding reverse mortgages. Here are the basics you
need to know.
What are Reverse Mortgages
A
reverse mortgage is a loan written by a private lender that is
insured by the government. To qualify you must be a senior age 62 or
older and have sufficient equity in your home. Reverse mortgages pay
as long as you are living in your home. If you sell the home or pass
away the balance you were paid becomes due. The home will need to be
refinanced or sold to pay back the reverse mortgage.
Reverse
mortgages were created to help senior citizens pay for the cost of
living. You can receive cash from your reverse mortgage all at once
or in monthly installments from the lender.
The downside of
taking out a reverse mortgage is that you are tapping the equity in
your home to pay for living expenses. If you decide to move and sell
your home you will be required to pay back the loan. The high costs
associated with securing this loan could negate any potential
benefits if you sell the home during the first five years.
The best uses for a reverse mortgage are to cover medical expenses
and day to day expenses. As long as you are planning to stay in your
home using a reverse mortgage is an excellent way to supplement your
cash flow.
