4 Reasons Why Reverse Mortgage Is A Good Idea

You may have already heard about reverse mortgages. Some say that you should steer clear of this type of loan while others say that it’s a good option. There’s no good or bad when it comes to this form of credit because there are several factors that need to be taken into account to determine if this is the right choice for you.

Why Take Out A Reverse Mortgage

Improving Your Budget

If you are what they call house rich but cash poor then you should consider taking out a reverse mortgage. If you own a house right now or have already paid off a large part of the mortgage but you do not have that much cash flow. If you have a sizable amount of equity in your home but don’t have that much money in your bank account, then you should consider getting a reverse mortgage loan.

No-Income Requirement Alternative to HELOC

Several homeowners reach the point where they have to start making home repairs. Let’s say you would like to make some changes or repairs in your house to make it more liveable and then you realize that in order to do the work, you have to take out a loan for the expenses.

If you were unable to qualify for a Home EquityLine of Credit or HELOC due to credit or income requirements as many senior borrowers have not discovered.

You don’t have to worry about general qualification requirements with the reverse mortgage loan credit line option. You also don’t need to worry about running out of budget because you don’t have to make monthly mortgage payments.

Retirement Asset Preservation

Don’t forget to talk to a reverse mortgage specialist if you wish to find out if this kind of loan is a suitable option for you. A lot of portfolios have witnessed extreme drops in value and many people are quite hesitant to lock in the losses by selling those investments at lower points and therefore, depleting their retirement assets.

With advice and careful planning together with your financial expert, you might feel that the reverse mortgage Charleston will provide you the chance you need to continue to live in your house without worrying about depleting your asset. Always remember that it’s not a financial recommendation and only you and your financial advisor could make this decision. However, the reverse mortgage offers you another option to take into account.

Improve Your Quality of Life

You don’t have to be struggling financially in order for you to consider taking out a reverse mortgage. You can take out a line of credit if you are facing an unexpected expense or for any purpose that you deem fit. You can use only a little and continue to keep your cost down using the HECM line of credit in order to preserve the equity for heirs and family or in case you don’t have any heir or kids and do not have a plan for your house after you’ve passed away, then a reverse mortgage could be a good option if you wish to improve your quality of life.

Call Reverse Mortgage Specialist if you need more information about reverse mortgages.

Reverse Mortgage Specialist
Charleston, SC 29401
843-353-6071
http://reversemortgagecharlestonsc.com/

Seniors Use Reverse Mortgage As Cash Lifeline Amid the Coronavirus Outbreak

The global economy is taking a beating from the coronavirus outbreak and investment portfolios are also taking a hit. Although all these bring unpleasant news to investors, the most affected ones are retirees who rely on their investments for income. And when these significant drops happen at the start of their retirement, they could lock in a lower nest, also referred to as sequence of return risk, permanently.

Financial planners suggest to leave the money even when the market is down. But this recommendation isn’t applicable for everybody. One approach that some financial advisors suggest to their clients is to take out reverse mortgages.

During the past few weeks, reverse mortgage applications have gone up. Applications for HECM or home equity conversion mortgage, which is the most usual kind of reverse mortgage that is backed up by the FHA orFederal Housing Administration, have gone up by 15% back in March. During the first quarter, applications increased by 50% compared to the same period in 2019.

Some financial planners said that a reverse mortgage could be another source of money. Compared to traditional loans, a reverse mortgage lets older homeowners to get access to the equity of their home, without the need for repayments as long as they remain in the house. The borrower should be at least 62 years old in order to qualify for a reverse mortgage.

There are three factors that would determine the amount that you can borrow. These include the age of the younger borrower, the appraised value of your home, and the current interest rates. The maximum loan amount that you can take out is 765,600, even if your home’s value is greater than that. Borrowers with a current mortgage in their house should use a portion of the reverse mortgage loan to pay that home loan first.

The interest rates on the reverse mortgage are adjustable. However, they are quite similar to conventional mortgages along with a 0.5% of the outstanding balance for the mortgage insurance premium. The HUD said that the adjustable HECM rates were at 4.01% back in March.

But you need to know that there are some catches with reverse mortgages especially since this type of loan can be quite complicated.

If you wish to keep the reverse mortgage loan in place, you have to continue maintaining your hours, pay the property taxes and property insurance. If you fail to do this things regularly, you may have to face foreclosure.

Another thing is the interest rate. The interest rate will accumulate throughout the life of the reverse mortgage loan. This means your loan balance will get bigger and could even go beyond the value of the house. Anybody who wishes to leave their house to their kids will not be able to proceed as they planned.

Reverse mortgage is referred to as a non-recourse loan. There something you can do when it comes to what your debt could lead to. Therefore, even if your mortgage remains underwater. What you’ll owe will only be the value of your house. Then, the insurance premium will protect the lender from loaning out much more the home’s value.

Call Reverse Mortgage Specialist for more information about reverse mortgage loan.

Reverse Mortgage Specialist
Charleston, SC 29401
843-353-6071
http://reversemortgagecharlestonsc.com/

Reverse Mortgage Lets You Borrow For Retirement

Many people argue that parents should not save for the college education of their kids. After all, as they say, there are college loans but there are no retirement loans. But is it really true that there are no loans available for retired individuals? What about reverse mortgages?

The Basics of Reverse Mortgages

A reverse mortgage can be compared to a home equity line of credit or home equity loan. But there’s one glaring difference. You won’t be making payments to the lender. Instead, it’ll be the lender who’ll be paying you. A reverse mortgage loan will provide you with another source of income that will supplement your other retirement funds like your Social Security benefits.

A HomeEquity Conversion Mortgage (HECM) accounts for around 980% of all reverse mortgage loans, making it a popular option among the seniors. A lot of individuals don’t know that their home is a valuable asset. They tend to overlook it as an integral part of their retirement planning.

A reverse mortgage is a great way of tapping into your home equity to cover your retirement costs, without having to give up your house. A reverse mortgage loan could be an excellent option for those who are cash poor but house rich.

Can I Get A Reverse Mortgage?

You have to be at least 62 years old if you wish to apply for a reverse mortgage loan. You should also own a house. In case there’s an existing mortgage on your property, the outstanding balance should be small and can be settled using the proceeds that you get from the reverse mortgage. You should live in the house and use it as your primary home. You must not be delinquent on any federal debut like federal student loans or federal income taxes.

What are your financial obligations as a borrower?

As a reverse mortgage borrower, you are responsible for maintaining your house, paying the property taxes, HOA, utility bills, flood insurance, and homeowners insurance.

How much money can you get?

The amount that you get will be based on the age of the younger borrower, the interest rate, the HECM FHAlimit, and appraised home value. The proceeds of the loan increase with the borrower’s age and go down along with higher interest rates.

In case the age of the borrower is below 62 years old, the spouse will not qualify as a reverse mortgage borrower. But the loan proceeds would be based according to the younger age of the spouse, so the spouse would be able to remain in their home in case the borrower dies first.

Generally speaking, a reverse mortgage Charleston is set to a limit of 50% of home equity. The borrower might be able to borrow more than the capped 50% in case the loan proceeds are used to settle an existing mortgage.

Call Reverse Mortgage Specialist if you wish to learn more about reverse mortgages.

Reverse Mortgage Specialist
Charleston, SC 29401
843-353-6071
http://reversemortgagecharlestonsc.com/

Can A Reverse Mortgage Affect Your Medicare and Social Security Benefits?

A recent survey conducted by the American Institute of CPAs revealed that one of the greatest fears of U.S. retirees is running out of money. However, homeowners who are at least 62 years old have equity in their home and they can use that as a tool to quell their anxiety. A reverse mortgage will let them tap into that equity by providing them the funds they need to calm them down and save them from financial troubles.

However, can the proceeds from a reverse mortgage loan affect the Medicare and Social Security benefits?

The Basics of Reverse Mortgage

Reverse mortgages, also known as home equity conversion mortgages or HECM were developed back in 1980 as a product that would help seniors to remain solvent while staying in their houses.

With a regular mortgage, you are required to pay the bank every month until you’ve paid off your loan in full. With a reverse mortgage, it works the other way around since the bank will be making payments towards you. You will be withdrawing cash against your home equity and the loan won’t come due until you decide to sell or move out of your home or if you die.

How much you will receive will be based on a certain formula that will consider your home equity, your age, home value, as well as the interest rate that you will be paying. You have the option to take the mortgage as a line of credit, monthly payment, or lump sum.

There are some significant disadvantages to this kind of loan. It generally carries higher fees like closing costs, origination fees, as well as mortgage insurance premiums. All of these can be included into the loan and that means you will have to pay less or you won’t have to spend any from your pocket at the start. However, this will be added to the amount that the bank is expected to receive once the loan comes due or is terminated.

Why Take Out A Reverse Mortgage?

These kinds of lending instruments are not right for everybody. First, if you are hoping to leave your house to your estates, a reverse mortgage Charleston may not be the best option for you. In case your family plans to keep the home then they can do this by settling the balance of your loan once you die or move out. However, you need to know that this could be quite expensive. Additionally, if you are expecting your heir to sell the house, the proceeds they will get won’t be as much as they expect.

Secondly, in case you are struggling to cover your daily costs of running your home, a reverse mortgage loan might not be a good idea. If you fail to take care of the home maintenance costs and taxes, the bank has the right to call the loan. However, if you are just looking to find another source of income during retirement so you’ll have peace of mind, then this is a sensible financial planning tool that is worth considering. Plus, it does not affect your Medicare and Social Security benefits.

Call Reverse Mortgage Specialist if you need more information about this type of loan.

Reverse Mortgage Specialist
Charleston, SC 29401
843-353-6071
http://reversemortgagecharlestonsc.com/