Retirees in today’s market have many things to consider. Namely, what does the future hold and will you have enough income and assets to persevere.
Aside from any investments, savings and assets that you have, a commonly overlooked but beneficial method may be your home equity. Can a reverse mortgage home loan be a viable tool in retirement? Here are three reasons why.
Getting Rid Of Payments
Chances are that you already have an existing mortgage, and that you also have an existing monthly payment. With a reverse mortgage, these payments would go away. You’d have access to your equity and you’d not be making a payment until after your death; when the balance due is covered by the sale of your home, with the leftover funds going to those as outlined in your will.
No Income/Credit Requirements
You don’t have to worry about proving income or having a high credit score with a reverse mortgage home loan. These loans are based upon the qualifying age of 62 or older, and evidence that you can maintain the home, pay the taxes and the insurance.
You will have to undergo third-party credit counseling first. And you will have to show that you can maintain your home, pay taxes and insurance. But you won’t have to prove income, credit or assets, which makes these loans a bit more convenient.
You Keep Your Home
Provided that you maintain the home as your primary residence and follow the agreements of your loan, you keep your home. This means maintaining the home in a typical fashion and making sure that property taxes and insurance are paid in a timely manner.
Reverse mortgages are usually offered in a variety of forms with the ability to take a lump sum, a monthly payout, a line of credit or a combination. They can be a powerful financial vehicle when in retirement that gives you access to money when you need it and as you need it.
A mortgage of any kind is a big financial decision, one that should be well thought out in advance. Make sure you consult with your financial advisor to gain qualified advice before making a decision to take one of these loans out.