If you or your spouse are at least 62 years of age and your home is paid for, but your living expenses deplete your savings a bit more every month, a reverse mortgage may be exactly what you need. Since you can get a loan for part or all of your home's value and elect to get a single lump payment or regular monthly payments, many senior citizens are able to enjoy retirement a bit more due to participating in this non-traditional type of loan. If you are on the fence about whether or not a reverse mortgage is the right choice, you need to be aware of the information shared below.
A Reverse Mortgage Is A Loan Against The Equity In Your Home
One of the most important facts you need to know about your reverse mortgage is that it pays you an agreed-upon amount of the equity in your home, assuming you qualify. When you obtain a reverse mortgage, the amount of money involved in the arrangement increases each month, even if that increase merely reflects the new interest that has occurred.
One factor that will impact your approval is your age. Specifically, you or your spouse must be at least 62 years of age at the time of applying. A reverse mortgage is usually seen as a permanent arrangement that exists until you and your spouse are no longer living in the home. However, there is the option of paying the loan off prior to that time, which would force the lender to remove the lien on your home. Alternatively, your friends, family members, or other interested parties could pay it off after your death or permanent relocation from the home. Regardless, it is best to determine your options when speaking with a representative from the Department of Housing and Urban Development, as you are required by law to do as part of the approval process.
You Might Qualify Even If Your Home Is Not Quite Paid Off Yet
In general, a reverse mortgage is only available to persons who have paid off their home in full. However, in some instances and if you owe a small amount on that loan, you might be able to get a reverse mortgage that would use part of the funds being provided to pay off that debt.
The important aspect of this unique arrangement will be that the entity providing the reverse mortgage has a primary lien on the property. Therefore, if you get a reverse mortgage when the home is almost paid for, your new lender will still be the primary lien holder, and any correspondence or questions after the paperwork has been completed should be addressed to them.
In conclusion, the use of a reverse mortgage is a popular choice for many senior citizens who own their own home and have higher living or medical expenses than they can afford. If that situation seems too familiar, you will benefit from the preceding information. For more information, contact a mortgage lender like Retirement Funding Solutions - Reverse Mortgages.