Who is a reverse mortgage good for?
It may be surprising, but anyone who is 62 and older can benefit from a reverse mortgage.
Reasons to do a reverse mortgage:
- To refinancing a current home and paying off existing forward or traditional mortgage to free up the monthly payment obligations.
- To put in place the line of credit option and all of its flexibility and growth for future planning and needs.
- To purchase your long term home with by using proceeds from the sale of your current home for down payment and allowing the reverse to finance the rest. It is generally 50% down 50% finance then you have no monthly payment obligations.
Remember, once you do a reverse mortgage your responsibilities are to:
- Keep the property as your principal or primary residence
- Pay Property Taxes Homeowners insurance
- Maintain the property which includes payment of HOA dues if applicable
After a reverse mortgage, and I pass away, my kids could lose the home?
Once owners have passed away, heirs have up to one year to sell or refinance the home to take advantage of remaining equity. Heirs are guaranteed with the mortgage insurance to never owe more than 95% of the home value at the time the estate is settled. The home pays the debt which is never passed on to the heirs. Heirs get less equity but, more cash.
What is considered the most important use of the reverse mortgage?
Refinancing out of your forward or traditional mortgage to a reverse mortgage in order to hault monthly payments and go to optional payments. It puts you in charge and simply better off.
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