5 Reasons
Why Reverse Mortgages Are
Becoming More Popular
In just the past couple of years, there has been a large increase over the
number of reverse mortgages that were given the year before. This seems to be
indicating a trend that shows that reverse mortgages are an ever-increasing
popular way for seniors to wisely get access to their home's equity.
Reverse mortgages do offer a good advantage to those who are thinking about
retirement and are getting nearer to age 62 - the minimum age required for a
reverse mortgage. Here are five reasons why more and more seniors are choosing
reverse mortgages.
1. It Does Not Require You To Have An Income
Perhaps the best reason for getting a reverse mortgage is because of a limited
income. That is - you can live on a smaller income than was needed when you were
making your house payments. Instead of you paying the lender, like you do with a
traditional mortgage, it now becomes reversed. The reverse mortgage lender now
pays you each month - an amount that you choose.
This also means that you do not need any kind of income at all in order to
qualify - there are no costs that you pay to get a reverse mortgage. The costs,
which are actually still there, are simply added at the end, when you move to a
nursing home permanently and the house is sold.
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2. It Makes Your Equity Money Available
All the money that you have tied up in equity is available to you. This means
that you can get your equity, and you choose how you will receive it. There are
three ways that you can receive the money:
- A lump sum payment
- Monthly payments with a credit line
- A lump sum and monthly payments
Some reverse mortgages are designed just to provide money for home improvement
or repairs. So, if you do not need the income or do not have a lot of equity,
and are low income, this may be what you need.
3. It Provides You With An Income
Everybody already knows that it is next to impossible to live entirely on your
Social Security income. A reverse mortgage enables you to receive a monthly
income of a size you select, and it could enable you to continue living as you
were before - for a long time. The key factor in this, of course, depends on how
much equity there is, and what happens to the value of the house in the coming
years.
4. It Enables You To Live In Your Home
Another nice feature of a reverse mortgage is that you do not need to move. This
arrangement enables you to live where you have been living - and get paid to do
it, too. You do not need to sell the house until you move into a nursing home,
or cannot live there for more than one year - for medical reasons. Obviously,
this simplifies things in that there is no packing and moving - just stay right
where you are.
5. It Is Available To Anyone Over 62
Once you become 62 years old, you are automatically qualified for a reverse
mortgage - if you own your own home and have some equity in it. Other than that,
there are no qualifications that need to be met.
Be sure to look around and get informed as to what any reverse mortgage involves
before you sign. You also want to make sure the reverse mortgage lender is
reputable. There are a number of scams with phony companies, so be sure to do a
little investigation before you close the deal - or you may stand to lose a lot.
Copyright 2007 By Mike Valles - Not to be
copied or redistributed without Permission of the author.
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