Experts always tell parents who are worried that they don’t have any savings for their retirement and kid’s college education to consider their needs first. What these professionals usually tell their clients is that their children can borrow for college but they can’t borrow for their retirement. But is this really true? What about reverse mortgages? Aren’t they considered as retirement loans, too?
There’s a financial product that permits seniors to borrow for their retirement. In case they have a substantial equity in their houses, they could take out what’s referred to as a reverse mortgage.
Unlike a conventional mortgage, a reverse mortgage loan won’t require you to make payments every month. Borrowers of this kind of loan don’t have to pay back their loans until they die, sell, or move. When the house is sold, any remaining equity once the loan has been repaid is handed out to the borrower’s estate.
There are numerous people whose wealth are linked to their houses and they are often referred to as house rich, cash poor. A reverse mortgage in Myrtle Beach provides people a good way of accessing their home equity.
Generally, homeowner who would like to get access to the equity that they have accumulated have to sell their house or take out a line of credit or home equity loan. However, selling is not an option if they would rather stay put, and they would like to make payments on the loan or line of credit. With all these options, a reverse mortgage loan could be appealing.
One of the main qualifications for a reverse mortgage is that the borrower must be at least 62 years old. You need to have paid off your mortgage or have already paid a significant amount so that you have a home equity to tap. Your house should be your primary residence. Aside from that, borrowers need to maintain the house and the homeowners insurance and property taxes should also be paid.
Borrowers have the option to take the reverse mortgage loan as a lump sum payment, line of credit, fixed monthly payments, or even a combination of these options. The size of the loan will depend on the age of the borrower and other factors.
Numerous homeowners get a reverse mortgage loan through the FHA or Federal Housing Administration’s Home Equity Conversion Mortgage program. Reverse mortgage loans obtained through this program are expected to be insured by the federal government and they can also be obtained thorugh FHA approved lenders. But, before anything else, FHA requires all borrowers to undergo housing counseling.
Before taking out a reverse mortgage, there are a few issues that you need to think about.
- You need to understand the rules about a non-borrowing spouse.
- You need to be sure that your property will always be maintained.
- If you are living with your children or other relatives, you need to make sure that they fully understand what happens once the reverse mortgage becomes due.
- Always be careful when it comes to draining the equity of your home.
Call Reverse Mortgage Specialist if you want to understand how this type of loan works and if it is the best option for you.
Reverse Mortgage Specialist
1293 Professional Drive, Suite 204
Myrtle Beach, SC 29577