Basic Outline of Reverse Mortgages

Basic Outline of Reverse Mortgages

A reverse mortgage is a financial tool tailored for senior citizens who own property, those above the age of 62 years whereby they can utilize the tool to access and subsequently convert part of their home equity into a tax-free retirement income. Rest assured that reverse mortgages are federally insured meaning you will not only get flow of cash but also financial security that comes with it, all of which you get without having to give up your title deed, make any monthly mortgage payments, or sell the property.

But why on earth is it known as a reverse mortgage? It is simple; it is the opposite of the forward mortgage whereby instead of you paying the mortgage payments, you are the one who is paid on a monthly, or at a lump sum, whatever you wish for as long as you will be living within the property you wouldn’t be expected to make any mortgage payments. And when the time comes, you will not have anything more than the total cost of appraised value of your property to owe to your lender. Furthermore, the bank will not claim any equity that is remaining on the property as it is meant for the home owner to enjoy.

What is the level of security in reverse mortgages?

As mentioned, reversed mortgages are federally protected… actually, the government has put some measures in place to safeguard the interests of its senior citizens and protect them from unscrupulous lenders. As such, before a reverse mortgage gets approved, there ought to be a third-party counseling session and further, there is a policy in place that no reverse mortgage should be processed unless the senior citizen takes the forms in person… this way, the senior citizens are protected against telephone and email scams.

Benefits

-          You have no limits to your expenses as you will be assured of supplement cash flow in addition to your retirement perk

-          In order to qualify for a reverse mortgage, you don’t have to have any form of income, as long as the home is registered under your name

-          You will have the peace of mind that comes with the knowledge of being fully insured and protected.

-          Note that the cash you get through reverse mortgage is not perceived as part of your income meaning it is free of taxation.

-          Reverse mortgages allow you to take advantage of the financial security that comes with them, and the security of knowing your future is secured within the property.

Needless to mention, with the additional cash that you get through reverse mortgages, you get extra cash to spend on such things as home improvements, paying for college education, touring the world, paying for an emergency expense etc.