Huge financial hurdles can derail your budget in a major way. However, more and more seniors and retirees are turning to or considering Home Equity Conversion Loans. Take a look yourself, so you know if you’ve found the best way to get you out of your money troubles again:
• You own a home
• You’re 62 years old or older
• You don’t plan on leaving anytime soon
You’ll have to make the home your primary residence. So if you regularly go off for weeks or months, visiting friends and family, then make sure you know the maximum allowable period you have for being away from home.
You must also be able to pay off the homeowner’s insurance premiums right along with your property taxes. If you don’t, you could end up defaulting on the loan and eventually lose your property to a foreclosure. Prevent that scenario from happening by talking this through with your loan specialist or advisor.
There are many different reasons why people are taking on HECM loans. The three below are some of them:
• Pay for your mortgage. If you still have debt leftover on your home’s mortgage, taking out a home equity, conversion mortgage loan can help you pay for the first one. It’s a complex process so get help. Don’t barge into it unprepared or you might end up with the short end of the stick.
• Cover the cost of your healthcare. The Housing Wire says you can use the proceeds from the loan to get the cash flow relief you need for your healthcare expenses.
• Pay for repairs. Maintenance services are one way to keep your home in shape. However, if your home was damaged in a downpour last month, or in any other way, you can use an HECM loan to pay off the necessary repairs.
So know how you can take full advantage of this arrangement. Consult a financial advisor to know more about it.