to Get a Reverse Mortgage
To Fund Your Retirement
You’ve worked hard all your life and your planning for your retirement. The best way to do that is to have a solid, practical plan in mind. This calls for financial planning that is specific to you and your life.
First off, start with a list. Not unlike a grocery list. You know what you need and you know the few things that are a splurge you’ll get if the budget allows.
Ask yourself a few questions when making your list:
– What are your biggest priorities to have a comfortable retirement?
– What is your budget going to be like?
– Will you want to travel? If so, where and how often?
– How much do you want to leave your kids?
– What is your health like? Do you anticipate medical bills or increased insurance?
One financial product that can help you achieve your retirement goals is a reverse mortgage. If you qualify and if your home meets the criteria it can be a powerful financial planning tool for some families and individuals.
Just don’t be fooled by television commercials and magazine ads. There is much more to it than those sources suggest. Basically, owning a piece of property that is your primary residence can give you excellent options for funding your retirement.
It may be that you can leverage the equity you have in the home to make wise investments and ultimately help secure your desired lifestyle in retirement. You may even be able to do this without selling your home and moving elsewhere.
If you want the straight up details on reverse mortgages and wonder whether you should even consider one, here are 5 critical factors to know about a reverse mortgage:
1) A Reverse Mortgage is a Type of Home Equity Loan
The use of the term “mortgage,” which can be misleading. In reality, a reverse mortgage is a type of home equity loan. The amount borrowers can receive depends (to some extent) on how much equity is in their home.
With a reverse mortgage you are borrowing your own home’s equity. However, unlike regular home loans, no loan payments are due until the loan becomes due.
**To qualify for a reverse mortgage the home owner must have homeowner’s insurance, pay the property taxes and keep regular maintenance on the home.
These are things you probably already do but because the lender now has an interest in the property it’s a requirement to receive the loan.**
2) The Primary Borrower MUST Be 62 or over
The fact is, reverse mortgages aren’t right for or even available to everyone. One of the first questions you’ll be asked is how old the homeowner is. The borrower must be at least 62 years old.
Recent changes, according to the Consumer Financial Protection Bureau, now allow the younger (non-borrowing) spouse to live in the home should the borrower pass away first.
Although, it would be wise to have an attorney advice before moving forward with the signing.
3) The home MUST be the borrower’s primary residence
You can own additional property such as a vacation house. However, it means the home the reverse mortgage will be taken out on must be where the borrower lives most of the time.
4) One Day… The Loan Will Be Due
A reverse mortgage lets you live on (and enjoy) the equity you’ve built up in your home.
You can choose to use this loan for your living expenses in retirement or use it for other types of investments. Including, real estate and various financial products.
However, as with any loan, it must be paid back in the end. This happens when the owner dies or moves away from the home.
5) The Heirs
It’s important to note that your heirs have rights to the equity in the home. They can choose between keeping the home or selling it. There are conditions to each option though.
There are 2 options:
#1 – If the loan balance is less than the property value, they can take over the property by paying-off the loan balance. They can do this using cash or a new mortgage.
#2 – The heirs can sell the home and keep the equity remaining after paying off the loan.
However, if the loan balance is equal to or more than the value of the home, then the bank keeps the difference.
Your heirs then have the choice of paying 95% of the appraised value or the balance owed to keep the home, whichever is less. Or, they can choose to sell the home or let the bank keep it and owe nothing.
Is a Reverse Mortgage Right for You?
Statistically, less than half of all Americans are adequately prepared for their retirement.
That’s why the time is now to talk to someone who can help you figure it all out. You deserve to have a happy and stress free retirement.
The fact is this, you’ve spent years of accumulating equity in your home and it’s one of the most accessible sources of cash for retirement.
A secure future is within your grasp and Real Property Money Associates can help.
Real Property Money Associates has a group of dedicated individuals waiting to help you figure it out. Our consultations are always free.
We can help you plan a retirement strategy and help you understand exactly what a reverse mortgage is and whether it is right for you. Why? Because it’s not right for everyone.
We’ve lived and worked in the tri-state area all our lives.
We know the market. We know the mortgage business.
We’ve got connections with lawyers, realtors, insurance brokers and all the other professionals needed to get the loan done right.
Contact Bob Anselmo today – 516-850-1399