How do reverse mortgages work, and are they a safe method to get equity out of my house?
How do reverse mortgages work, and are they a safe method to get equity out of my house?
Tags: Equity, House, Mortgages, Reverse, reverse mortgage, safeHow do reverse mortgages work, and are they a safe method to get equity out of my house?
Tags: Equity, House, Mortgages, Reverse, reverse mortgage, safe
A reverse mortgage is a really great thing if you have lots of equity in your home, and you don’t have very much liquidated cash to enjoy your retirement.
Anyways, you can find some info and resources about reverse mortgages here:
http://reversemortgageresource.blogspot.com
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A reverse mortgage is used to those individuals who have little to no income…mostly people living off of social security…but have a lot of equity in their homes.
Then the debt is left to the kids to sell the house to pay off the mortgage when the parents die.
This is a safe way to provide yourself with a more comfortable retirement, but you would have to speak with your kids and make sure this responsiblitiy is something that they are willing to take on.
because the mortgage still collecting interest. So if you live a long time (more then 10 years) you might leave a debt for your kids to pay….
Talk to your family and ask them what they think. Good luck.
A reverse mortgage allows you to collect a monthly benefit from your lender, from the equity within your home.
Rather than paying them each month, you will get a bit of your equity loaned out to you. There is a rate in which the lender will charge you, but it’s peanuts in comparison to what you can spend it on.
Many people are doing this within there retirement years to prevent from the government steppin in and taking everything for assisted living. In addition, others use it to just spend whatever they saved and enjoy there lives.
Call a previous lender or consult with a financial advisor. Many of them have the knowledge you need. But don’t act or settle for the first one. You’ll need to start educating yourself a bit, at there expense.
In addition, I wouldn’t consult with your children cause it’s your equity and your home. You didn’t consult with them when you wanted to purchase it did you.
Worse case scenario is that you bleed your funds dry before you pass away, and leave nothing to your aires.
A reverse mortgage allows senior homeowners, 62 year and older to access equity out of their home and not have to make payments until permanent move out. The amount available to the borrower is based on the youngest borrowers age, current interest rate and your counties lending limit (for the FHA/HUD reverse mortgage). You can either take a monthly payment, line of credit or lump sum (or any combination).
Are reverse mortgages safe? Yes, All reverse mortgages are non-recourse loans, meaning you can never owe more than the home is worth. The lender can never kick you out of the home or ask for repayment while you are living in the home. The loan is due and payable at permanent move out of both borrowers.The heirs can have extensions up to one year to sell the house, pay off the amount borrowed plus interest, or refinance the mortgage. The heirs will receive any remaining equity. The lender does not take the house!
For further information visit http://www.reversemortgage.org. On this site, you can also find reliable lenders for your area. Good Luck!
Reverse mortgages are available to retired people with equity in their house. I think 62 is the minimum age. The bank makes a monthly payment to you each month. The maximum payment is based on your age and the age of your spouse, the equity in your house, and on the agreed on interest rate. Every month interest and the payment made to you are added to the balance. When you decide to move or when you and your spouse have both died, the house is sold to repay the debt. If you have heirs, I think they have a certain amount of time to sell it themselves (through the estate). If they sell it for enough to pay all of the balance plus interest, your estate gets the remainder to give to your heirs. There are two risks. One is that if you want to move, you will have to pay off the reverse mortgage when you sell the house, which will reduce your equity. The other risk is that paying the loan will leave nothing to your heirs. I do not think that is really a big risk to worry about. You already took care of your kids when you raised them and paid for their education.