Retiring with Reverse Mortgage Protection
You are considering retirement. You are wondering if you have enough savings to live comfortably in your golden years. And you have equity built up in your home - perhaps you even own your home. You may want to consider a reverse mortgage. Here are six reasons why.
- No income requirements. With a conventional loan, the borrower generally needs to have a steady source of income, to demonstrate that they will be able to make payments on the loan. This could be a problem if you are retired! But reverse mortgages are different. It doesn't matter if you aren't earning money.
- Only available to seniors age 62+. Reverse mortgages are specialty products that are only offered to seniors. The older the borrower, the greater the amount of the loan.
- Stay living in your home. The purpose of the reverse mortgage is to allow you to remain in your home. As long as you keep the home well maintained, and continue to pay property taxes, you can continue to live in your home for the rest of your life.
- You or your heirs cannot owe more than the home is worth. Let's say the value of the home drops significantly after a reverse mortgage is signed. Regardless of the loan balance, the borrower will never owe more than the new market value of the home. In other words, the loan is "non-recourse."
- No taxes. The payments from a reverse mortgage are considered a loan advance, and not taxable income.
- Few up-front expenses. The only out-of-pocket expenses are the counseling fee and the appraisal deposit. All other costs can be financed as part of your new reverse mortgage.
Every situation is unique. To find out how a reverse mortgage can work for you,
(photo by SCA)