The Basics Of Reverse Mortgages
In today’s economy, many seniors are struggling to live a comfortable life even if the government gives them their pension. In most cases, seniors don’t have enough financial resources to support themselves and have difficulties providing for their medical expenses, home repairs, home maintenance, and social security contributions. They tend to have an expensive home that does not give them the needed advantages to keep up with their way of living. They have the option to apply for a loan using the equity of their home. However, the amount they need to pay on a monthly basis along with high interest rates could only worsen their financial situation. Fortunately, there’s another option and it is referred to as reverse mortgages.
What You Need To Know About Reverse Mortgages?
It is a process that provides you the luxury to convert your home’s equity into cash. But with reverse mortgage, you don’t have to worry about making payments every month. Reverse mortgage is a promising program for several senior citizens who are in great need of a source for steady cash flow. In order to prove that, you just have to check out the statistics showing the significant rise of reverse mortgages every year.
You also have the option to get payment in three forms when you get a reverse mortgage in Columbia. You can get it through a single lump sum, credit line account, or payment every month.
Three Types Of Reverse Mortgages
Single purpose reverse mortgages are commonly provided by non-profit groups which includes the state or local government. It is the most affordable kind of mortgage you can apply for. However, it comes with a disadvantage and that is you have to qualify for a certain income requirement.
Proprietary reverse mortgages is a kind of mortgage that is linked to private companies and has minimal qualifying restrictions. However, the borrower need to pay an upfront fee.
HECMs or the home equity conversion mortgages are extremely popular because it’s the only kind of mortgage that can guarantee that whatever’s been promised by the loan shall be provided. This kind of mortgage is supported by the government.
Other Requirements Of Reverse Mortgage
The applicant must be 62 years old to be able to apply for a reverse mortgage loan. You need to the primary occupant of the house. Also, you can pay off the small mortgage balance from the loan proceeds that you receive.
The amount that will be provided to you on a monthly basis will be based on several factors. These factors include the location house, the age, and the price value of the property. To put it simply, each amount that you are provided with lessens the equity value of your home. And it is also crucial to note that the overall loan amount can’t go beyond the value of the equity of your home.
The calculations could be quite confusing. This holds true for most people especially for seniors. However, you don’t need to worry about your age. You can find a lot reverse mortgage calculators on the web. All you need to do is type the phrase and you will get several links that could provide you with the online calculators that you need.
There are certain risks involved in this kind of reverse mortgage, so it is recommended that you talk to a reverse mortgage expert. Once you get the facts straight and you are well prepared, your senior years could very well be the best years in your life.
Reverse Mortgage Specialist
Columbia, SC 29205