Here’s how reverse mortgages can help certain homeowners.
A reverse mortgage is a special loan for people who are age 62 or older. It uses the house as collateral instead of looking at debt-to-income ratios and credit history. With a reverse mortgage, you aren’t required to make monthly mortgage payments, although you can if you want to.
There are a few different ways you can use reverse mortgages. The first is to refinance. Refinancing with a reverse mortgage is perfect for those who are looking to stay in their home while also freeing up some cash.
A reverse purchase allows sellers to use the proceeds from their property to purchase another home and they aren’t required to make a mortgage payment on it.
“When the homeowner passes away, the lending company does not get the house.”
There is a very common myth about reverse mortgages that I want to correct: When the homeowner passes away, the lending company gets the house. This is simply not true. Your heirs have two different options. First, they can sell the home and pay off the mortgage, or they can pay off the mortgage and the home is theirs.
Keep in mind that a reverse mortgage is not ideal for everyone over 62 in every situation. It’s important to talk with your accountant and/or attorney before you decide to get a reverse mortgage.
If you have any questions about reverse mortgages or real estate in general, don’t hesitate to reach out via phone or email today. In the meantime, be kind, be safe, stay healthy, and reach out to your loved ones. I look forward to hearing from you soon.
