Is Reverse Mortgage a Financial Safety Net?
Most people cannot wait to retire and starting living out their dreams For real, who wouldn’t want to spend the whole month chilling on a Hawaiian beach, like the Punaluu Black Sand Beach or the Waimanalo beach, enjoying the explosive, exotic taste of Blue Hawaii – a turquoise tropical drink? Or fulfil that fantasy you’ve always dreamt of all through your career years? Image Credit: Alexander Stein/Pixabay)
However, these breath-taking activities require one element – money. And what happens when you don’t have the cash even visit the grocery store? To some, retirement is a dream come true, while to others, such a period calls for significant concerns. Nevertheless, there is no need to panic, as a reverse mortgage provides the ideal financial security you need.
What is a Reverse Mortgage?
Reverse home loan, also known as a reverse mortgage, is a financial debt instrument that helps finance your needs using your home as collateral. Look at it this way, unlike the regular home loans that require monthly repayments (which can be burdensome to many homeowners); a reverse home loan gives you the flexibility to defer payments until the end of the mortgage term. You no longer have to worry about meeting up with monthly loan deadlines that come with strict adherence and penalties.
What Should I Consider This Loan?
Most homeowners dread taking a mortgage for fear of losing their homes if they fail to meet up with the requirements. However, it is different when it comes to a reverse mortgage. Here is what we would like to point out: one primary condition for getting this loan is that you should have and live in a permanent residence as its legal owner. This condition makes your loan legal and valid.
So, what does this loan option imply? Being a legal owner and resident in your home means that you cannot be evicted. Another aspect worth noting is that this reverse mortgage does not require a consistent repayment plan. Hence, you can defer payments until you decide to leave the house. Bear in mind that your lender will evaluate the following:
- Your consistency in paying property taxes
- How well you can maintain the property
- Your compliance with insurance coverage
What Does the Application Process Entail?
Okay, so now you’ve understood all there is to reverse mortgage, and you are wondering where to begin. No sweat! To start with, consult a reputable lender to find out the percentage of your available home equity you can borrow. Remember, you cannot access everything due to federal laws. However, do not worry; your lender will evaluate your home employing a special financial calculator tool to determine what you can receive.
A reverse mortgage is only available to homeowners that are of the ages 62 years and above. These individuals are to undergo detailed credit evaluation and other background checks to determine their credibility in handling such loans, before loan approval. If you fall within this category, kindly apply right away. Consider this mortgage option as your retirement loan.