Ever heard of a reverse mortgage or wondered what a reverse mortgage was all about? Well, wonder no more. It’s time to unlock the mystery. In the following sections, you’ll learn the definition of a reverse mortgage, how to qualify for a reverse mortgage, and why a reverse mortgage may be right for you.
What’s a Reverse Mortgage?
For those with no knowledge of reverse mortgages, this term can sound a bit vague or confusing. So, before we do anything else here, let’s clear up the meaning of a reverse mortgage. Simply put, a reverse mortgage is mortgage loan in which the lender makes payments to the homeowner. This is a lot different than a traditional mortgage. Typically, the homeowner makes monthly payments to the lender until the principal loan amount is paid in full. With a reverse mortgage, payments are the other way around — or in reverse.
Who’s Eligible for a Reverse Mortgage?
How does someone qualify for a reverse mortgage loan? It’s not as complicated as you might think. First, you have to be age 62 or older. In addition, you must own the home for which you want the reverse loan or have significant equity in the home. The house must also be your primary residence (you just have to live there at least six months a year).
Many people at or near retirement age don’t have enough income to live comfortably. This is where a reverse mortgage can help. Homeowners with a reverse mortgage turn a portion of their home equity into tax-free cash they can use for various purposes. These include perhaps extending their retirement or taking an early retirement. Others may want to use the income from a reverse mortgage to consolidate debt, make home improvements or create an emergency fund.
While many candidates for a reverse mortgage have already paid off their home, others have not. For these people, a reverse mortgage means first and foremost eliminating their monthly mortgage payment. Then, it’s possible they can still turn any leftover home equity into tax-free cash. Want to know more about the benefits of a reverse mortgage? Click here.
While there are numerous benefits to getting a reverse mortgage, this kind of loan isn’t necessarily for everyone who’s eligible. However, for many people, a reverse mortgage will provide just the stream of income they need to relieve some financial pressure and have a better life. Click here to start a reverse mortgage application. Or you can contact us or click below for a free reverse mortgage evaluation. We look forward to helping you explore your options!