Interested in a Reverse Mortgage?
Understanding just how a reverse mortgage works is one of the most important aspects to deciding whether or not it’s right for you. So without further ado, here’s what you should know about a reverse mortgage.
What is a Reverse Mortgage?
A reverse mortgage is essentially exactly what it sounds like. By definition, a reverse mortgage is a type of loan in which the lender actually pays you on the equity of your property, rather than you paying the lender. It’s tax-free income, however, it’s only for those who are 62 and older. Additionally, while the owner does not pay monthly, this loan must be paid back in full before moving out, before the borrower dies, or sells the home altogether.
In addition to these stipulations, there are other factors to consider when it comes to the principle limit, those standards being:
- The age of the youngest borrower
- Current interest rates
- And the HECM mortgage limit
- The home’s value
The older you are, the higher the principal limit. Higher property value? Higher limit. These are things that should be reviewed before considering a reverse mortgage.
Furthermore, a reverse mortgage offers many benefits. Read more below.
Top 5 Reasons You’ll Want to Choose a Reverse Mortgage
- Budget Space and Relaxation – Once you’re retired it’s most likely that you’re living on a fixed income. With a reverse mortgage, you can give yourself a bit of wiggle room, ensuring that your bills are covered while also freeing up some of your monthly income.
- Home Improvements – Ensuring that your home remains a functional space for you to live in is of the utmost importance but it may require some upgrades and renovations. These can be somewhat costly and with a reverse mortgage, you can make the necessary changes to your home without worrying about where the money is going to come from.
- Fund Long-Term Care – In our older age we may see higher medical costs and the need for an in-home care provider becomes ever-present. Sometimes, this can be more affordable than moving to an assisted living facility but still can require quite a bit more funds. This is one great reason to consider a reverse mortgage.
- Debt Consolidation – Using your reverse mortgage allows you to get out from other types of loans that may have much higher interest rates. Consolidating this debt can help with monthly costs immensely.
- Enhance Your Life – It’s important to make sure that you’re enjoying your retirement and giving yourself more funds to work with every month leaves you with more money to use on leisurely activities such as spa days or vacations. Life enjoyment is just as important as handling financial aspects of your life.
When it comes to reverse home mortgages we know there’s a lot to consider, in fact, we didn’t even cover all of the stipulations of them here. Not to worry, the professionals here are Calstar Mortgage are here to help you navigate the world of reverse mortgages, as well as many other types of loans as well.
Don’t hesitate to get started by speaking with one of our experts! Click here or give us a call at (818) 952-2815 or (818) 952-2701!
