Reverse Mortgages (Good or Bad)
I recently had a client of mine tell me "I just did a reverse mortgage and it is the best thing I have ever done" He went on to say that through his reverse mortgage he is able to gain interest on the equity in his home. That peaked my interest in finding out about what this Reverse Mortgage thing is all about. I had always heard how bad they were so I really wanted to understand what he was so excited about. As it turns out the reverse mortgage program has a lot of new rules and benefits that are so much better than ever before. They still aren't for everyone but today's version is making sense for many seniors, some who are living in homes they no longer need or want (many in 2 story homes) who just don't have the cash available to get into anything else. Since you are using the equity in your home credit scores are not a factor with reverse mortgages. Some seniors who are struggling to meet their monthly expenses and need additional cash, maybe still have a house payment that they struggle to make, or just want to travel and do some of the things they always planned for retirement can benefit. Here are some of the changes with reverse mortgages:
1. The homeowner can stay in their home until they die, the bank does not take it away.
2. If equity is still left in the home when the owner dies it goes to the heirs.
3. Heirs have the option of buying the home at 95% of the current market value.
4. They are now non-recourse loans meaning that should the homeowner use more money than they have available their heirs will not be responsible for the difference.
5. You can sell your current home and use all or part of the the equity to get into a home that better meets your needs and in most cases use the reverse mortgage on the new home so you have no payments on the new home.
6. You have options on how to take the money, you can take a lump some, payments over time, or have it set aside as a home equity line of credit that draws interest.
7. There are choices of fixed or variable interest rates.
As with any loans you take out you need to completely understand all the costs involved and decide if the process makes sense for you. It is always recommended that you talk with a professional and when meeting with them have your children or other relatives there so everyone understands the process.
Call us if you need a recommendation to a trust worthy person who can provide you solid information that is easy for you to understand on the reverse mortgage program. Sandy (916) 544-2066 or Steve (916) 425-1100..
1. The homeowner can stay in their home until they die, the bank does not take it away.
2. If equity is still left in the home when the owner dies it goes to the heirs.
3. Heirs have the option of buying the home at 95% of the current market value.
4. They are now non-recourse loans meaning that should the homeowner use more money than they have available their heirs will not be responsible for the difference.
5. You can sell your current home and use all or part of the the equity to get into a home that better meets your needs and in most cases use the reverse mortgage on the new home so you have no payments on the new home.
6. You have options on how to take the money, you can take a lump some, payments over time, or have it set aside as a home equity line of credit that draws interest.
7. There are choices of fixed or variable interest rates.
As with any loans you take out you need to completely understand all the costs involved and decide if the process makes sense for you. It is always recommended that you talk with a professional and when meeting with them have your children or other relatives there so everyone understands the process.
Call us if you need a recommendation to a trust worthy person who can provide you solid information that is easy for you to understand on the reverse mortgage program. Sandy (916) 544-2066 or Steve (916) 425-1100..
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