With newer laws and restrictions that are in place, the reverse mortgage home loan is an even more attractive option for retiring couples that may not have the nest egg set aside that they wanted. Newer rules mandate that borrowers have their financial ability assessed first, an update that has drastically reduced the amount of these loans that are foreclosed on.
Bear in mind that you do not need to have income or credit to qualify, just enough assets and set aside income to cover the basics, such as property upkeep, taxes and insurance. If you are thinking about getting a reverse mortgage home loan to use as a supplement for your retirement income, there are a few benefits that these loans offer.
Experts say that before you consider a reverse mortgage as a retirement vehicle, assess your expenses. You can use a variety of retirement income projection tools (which can be easily found online) to determine what your pension, investment funds and Social Security will ultimately pay out. This can help you better discern whether or not you would benefit from the funds that’d be received with a reverse mortgage.
In a typical borrowing scenario, you can tap into as much as 70% of your home’s equity. This can vary depending on the home type, value and some other associated factors. Don’t forget to factor in closing costs, origination fees and other related expenses along the way.
Make sure you also do not forget this one solid grain of advice: once you meet the minimum qualifying age for these loans, you can take them out at any time. Meaning, that even if you find that you will be able to cover your retirement expenses just fine now, if some hidden bill like a medical expense suddenly surfaces later on, you are still covered because you can take these loans out at any time.
Perhaps the wisest course of action would be to confer with your financial advisor beforehand. They can provide invaluable retirement advice using their experience and knowledge. This can better enable you to arrive at the most proactive solution for your situation. It’s good to know, though, that if you do own your home, there’s always an option with these loans should the need arise.