Normal house loan will make us pay a monthly amount which is including principal and interest. With this instalment, the amount that we owing go down and the equity in our home go up. In this article, a reverse mortgage can be explain and works in an opposite method. With a reverse mortgage we can turn the equity in our home into cash. We do not have to make monthly payments.
Reverse Mortgages are helping older accomplish better financial security. Imagine if we having extra income every month for the rest of our life. This is likely by using some of the equity in our home as part of a well balanced and reasonable retirement plan. The idea of a reverse mortgage can take a part in the face of reason at first look. Usually, we have spent a good arrangement of time and effort trying to eliminate our mortgage. Is it the mortgage or the payments that we wanted to remove? Mainly, it’s the payments. As at today, a reverse mortgage has no payments due during the term and period of the loan.
Most of us consider our home as an investment. The deception has always been how to plug this investment without giving up the protection aspect of the home. We know that the conventional or traditional way of doing this has been to refinance to a larger or big mortgage or take out a house equity loan. The difficulty is, both of these options incur an instant repayment schedule and in most cases extend the period of time payments or instalment need to be made. Just the reverse of what most of us want.
A reverse mortgage allows us to get some of the equity out of our house and into our pocket without any instalment schedule for as long as we have the loan. The best parts are tax free and can be used for any purpose we wish for. So, what are the requirements or needs in order to get a Reverse Mortgage? The youngest or minimum age of borrower must be at least 62 and the house to be the principal or primary residence to qualify for a reverse mortgage. Adding together, the property must be maintained, taxes must be kept current and house owners insurance must be in force for the loan to stay on in place.
How effective a reverse mortgage influence Social Security, Medicare or Pension and retirement benefits? A reverse mortgage does not effect or change any of these advantage or benefits but it’s best to consult a professional financial advisor and legal counsel as well as lawyer. Furthermore, as long as the monthly cash advances are fully spent each month and not accumulated, there will be no effect to our SSI or Medicaid advantage. Anyhow, again, don’t forget to get a legal advisor or our local Agency on Aging. We can say that reverse mortgage could be just the voucher to enjoying a greater quality of life in our retirement years soon.