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January 24, 2020
More and more seniors are asking themselves: “Should I get a reverse mortgage?” A reverse mortgage is a loan against your home that you do not have to pay back as long as you live there. You or your estate pays the money back plus interest when you die, sell your home, or permanently move out of the residence. You also have the option of paying off the mortgage beforehand, if you have the money to do so.
A reverse mortgage can be a great product for seniors who wish to access their home equity. But there are drawbacks to the program and it is not for everyone.
Is a reverse mortgage right for you? Read on to find out if you should get a reverse mortgage:
When trying to figure out, “should I get a reverse mortgage,” the most important consideration is whether or not you need (or want) additional funds for retirement. Many people have opinions about reverse mortgages, but the reality is this: reverse mortgages can be a great way — and sometimes the only way — for seniors to get access to their home equity to use however they want.
Seniors are living longer than ever and many people need to tap their home equity to fund their longevity. Many people use Reverse Mortgages to supplement their retirement income, fund medical expenses, pay for education expenses, or even fulfill a lifelong dream like traveling.
Reverse mortgages can also be a great way to eliminate your mortgage. If you have an existing mortgage against your house, a reverse mortgage may enable you to pay it off. This will save you money every month by eliminating your mortgage payment and possibly even leave additional cash available to you.
Eligibility requirements for a reverse mortgage include:
Even if you need or want the cash and meet the eligibility requirements for a Reverse Mortgage, there are other important considerations when deciding, “should I get a reverse mortgage.”
Reverse mortgages continue to increase in popularity. However, there are other options for accessing your home equity.
Consider these options:
HELOC: Many seniors consider a HELOC – a home equity line of credit. The main downside with this type of product is that there are income requirements in order to qualify. Additionally, unlike a reverse mortgage, the loan must be paid back via monthly payments. On the other hand, the overall impact of a HELOC on your estate tends to be less than that of a reverse mortgage.
Downsizing: Moving to a less expensive residence can be a financially efficient way to access your home equity.
Continue here to compare the different ways of tapping your home equity for retirement.
Or, if you would like to be connected with a prescreened reverse mortgage lender, continue here. NewRetirement will only connect you with lenders who are properly licensed, approved by the Department of Housing and Urban Development (HUD), and adhere to the National Reverse Mortgage Lenders’ Association (NRMLA) Code of Ethics.
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