Reverse Mortgage Basics
What is a Reverse Mortgage?
A reverse mortgage allows you to tap into the equity you’ve established in your home. Instead of making payments on a monthly basis, you can choose to receive them. That is where the term “Reverse” comes from in Reverse Mortgage. To be eligible, you must be 62 years or older and own your home free and clear or have a mortgage balance which can be paid off with a reverse mortgage. In most cases a reverse mortgage will give you access to funds on a tax-free basis, however you should consult a tax advisor to confirm this. Also, you should review what impact, if any, a Reverse Mortgage could have on other benefits you are receiving.
Why Should I Get A Reverse Mortgage?
There are no restrictions on how to use the proceeds you receive through a Reverse Mortgage which means you can direct the funds to a variety of purposes, including:
- Eliminating your existing mortgage
- Supplementing your retirement income
- Increasing the value of your home through remodeling or repairing your home
- Covering Healthcare Costs
- Planning for long-term care needs
How Does a Reverse Mortgage Differ From A Traditional Home Loan?
In order to obtain a traditional mortgage or a home equity loan, homeowners qualify based on credit history and debt-to-income ratio. They borrow money and in return make monthly payments. With a Reverse Mortgage your home can make payments to you and is available regardless of your current income, credit history or debt-to-income ratio.
Three Important Facts to Remember:
Being in a position to make an educated decision begins with addressing the common misconceptions which can keep many homeowners from looking into the advantages of a Reverse Mortgage. Contrary to what many people have heard, as long as all property tax, insurance and maintenance requirements are met:
- You can never owe more than the value of your home.
- You will retain title to the property.
- You will receive payments instead of making them.
To learn more, please contact Ben Stucker at 856-505-6603 or bstucker@annie-mac.com
