Pros and Cons of a Reverse Mortgage

Pros and Cons of a Reverse Mortgage Reverse mortgages are based on the home's equity and typically used as supplemental income for older homeowners. In many cases, a reverse mortgage can be advantageous for a home owner. Qualifying is easy when the home is fully owned, and has a substantial amount of existing equity. Real Time Mortgage Refinance Leads can help eligible borrowers through the process, selecting one of three methods of payment. 01 Lump sum 02 Monthly payouts 03 Line of credit Pros of Reverse Mortgages Reverse mortgages use the home as collateral allowing the owner to remain in the home, while the payments are being made from the loan proceeds. Secondly, reverse mortgage funds are loan proceeds and non-taxable. Eligibility for seniors is 62 years of age, and a single detached home or approved condominium. There are no restrictions on how to use the proceeds Eliminates the need to sell the home Increased equity beyond the reverse mortgage belongs to the homeowner Cons of Reverse Mortgages Seniors participating in Medicaid or receiving Supplementary Security Income and considering a reverse mortgage need to be selective on the method of payment. The reverse mortgage may affect eligibility for these government programs, if the lump sum exceeds the allowed bank balances or income limits for individuals or couples. Generally higher interest rates compared to conventional mortgages Reverse mortgages have two fees associated with this type of loan: FHA Mortgage Insurance, Origination fee You sell your house for less than half the value and then agree to rent it back from the bank for the other half of the value. Summary The purpose of a reverse mortgage is to help the borrower maintain a lifestyle and manage the cost of living without depending on others. A reverse mortgage loan offers a lower interest rate compared to traditional mortgage or home equity 1oans, making the best use of the largest asset owned during our lifetime. This form of loan can also have a positive effect as part of the estate planning, because any remaining equity after the loan balance is paid remains within the estate plans. brokermatch.com/blog/reverse-mortgage-leads/ » » »