Is a Reverse mortgage right for you?
You’ve probably heard the term ‘reverse mortgage’ or seen an ad on TV about it at some point. Even still, you may not understand exactly what a reverse mortgage is or how it works. You’re not alone. Reverse mortgages can be confusing. The good news is getting a reverse mortgage has become much easier to understand in recent years and can offer great benefits for many people.
A lot of seniors have struggled since the recession because the nest egg they had counted on for retirement may not be enough anymore. It may seem hard to believe but the average Social Security benefits for retirees today is just $1,294 per month. When older adults don’t have access to the income they need, they might neglect their health or become isolated from family and friends. This is where a reverse mortgage may be able to help them keep their independence and regain greater control of their financial future.Get free reverse mortgage quotes
You can qualify for a reverse mortgage if:
- You’re 62 years of age or older
- The home must be your primary residence
- You must have paid off most, or all, of your current mortgage
What is a Reverse Mortgage?
A reverse mortgage is a government insured loan that allows individuals 62 years of age or older to access the equity in their primary residence and convert it to cash while continuing to live in the home. Instead of making monthly mortgage payments, payments are made to the individual.
Tips and pitfalls of reverse mortgages
- There are no such things as AARP reverse mortgage
- Put both spouse names on contract so it won’t expire if one is deceased
- Put reverse mortgage in estate planning
- Loan-to-Value Ratio (LTV)
- The relationship between a property value and the amount of loans against it. LTV is calculated by dividing the loan amount by the property value. <a href='/glossary/what-is-loan-to-value-ratio' title='See the full definition of Loan-to-Value Ratio (LTV)'>read more</a>
- Home Equity
- Home equity is the difference between the market value of a home and any outstanding mortgage balance(s). A homeowner with a $200,000 property and a... <a href='/glossary/what-is-home-equity' title='See the full definition of Home Equity'>read more</a>
- U.S. Department of Housing and Urban Development. The Federal Housing Administration (FHA) within HUD insures home mortgage loans made by lenders and... <a href='/glossary/what-is-hud' title='See the full definition of HUD'>read more</a>
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