Whenever I am asked about reverse mortgages I find myself cringe. If you are a homeowner over 62, this is a unique opportunity to acquire spendable funds from your home, even if the mortgage is not paid off. But, before you do consider what you are going to use the funds are for and is it your only resource.
For homeowners over the age of 62, you can obtain a reverse mortgage (also known as a HECM, a home equity conversion mortgage), which gives qualified senior homeowners a solution to help fund their retirement needs. More importatnly to most independent seniors, a reverse mortgage helps them with the resources needed to live in their home as long as they wish.
Here are a few facts you need to know about a reverse mortgage:
- Candidates must be at least 62 years of age, have significant equity in their property and be looking for a reverse mortgage on their primary residence only.
- Anyone interested in applying for a reverse mortgage is required by law to complete a 45-minute counseling session with a HUD (Housing and Urban Development) approved counselor to really understand the ins and outs.
- Payout from a reverse mortgage can be done several ways: all at once in a lump sum of cash; as a regular monthly loan advance; as a credit line that lets you decide how much cash to use and when; or you may have the option to choose a combination of any of these payment plans.
- The amount of cash you can get from your home’s equity is determined by several factors including age, home value and location and current interest rates.
- And lastly, please remember that reverse mortgages may have tax consequences, may affect eleigibility for assistance under Federal and State programs, and may have an impact on the estate and heirs of the homeowner.
If you are considering a reverse mortgage and would like more information, please go to http://www.reversemortgage.org