Lending agencies offer reverse mortgages for seniors who qualify based on age, home value, equity, income, and taxes. This type of financing provides them with options to use their home as part of their retirement plan. Borrowers should always do thorough research before applying and weigh the benefits that reverse mortgages offer.
Home equity conversion mortgages are fully insured reverse mortgages for seniors. If the value of your home decreases because of declining housing market trends, your loan amount can never exceed the value of your home. Thus, if the housing market crashes, you and your beneficiaries are not held responsible, and the Federal Housing Authority pays the difference.
Reverse mortgages offer multiple payment options. One-time payments and monthly payments are available, or borrowers can choose to open a line of credit. Cash payments and lines of credit can be received in combination.
Eligible for Benefits
The federal government does not recognize payment from a reverse loan as part of regular income. This means that Social Security and Medicare are not affected by reverse mortgages for seniors who are receiving benefits. However, other private agencies may consider reverse mortgage loan disbursements as income and update their benefits package accordingly.
Borrowers Keep Their Homes
Borrowers do not turn their homes over to a bank. They still possess the deed to rightful ownership and are simply receiving a portion of the equity in the home they already purchased.
No More Mortgage Payments
Reverse mortgages for seniors who are still making monthly mortgage payments are utilized to pay off the remaining mortgage balance first, then the remainder of the money is distributed to the borrower.
Overall, reverse mortgages can provide options and security for seniors who are looking to utilize their home investment to support their quality of life. Talk to your lender to decide whether a reserve mortgage is a right option for you. Click here for more details.