It can be difficult to find liquid assets once you are in or near retirement. If you are retired you are likely on a fixed income. If you’re close to it, you are probably diligently saving to make the most of your life once you stop working. While financial responsibility is always the best move — and can account for a lot of the curve balls life throws you — sometimes big, unexpected expenses arise. When they do occur, even the most thorough of planners can find themselves at a loss. Luckily, there is a solution to these unforeseen events. A reverse mortgage is one of many helpful tools tool that you could very well benefit from. In today’s blog, Family Home Loan Texas discusses everything you need to know about reverse mortgages and how they can help you.
What Exactly Is It?
A reverse mortgage is a loan that is available to homeowners that 62 years and older to borrow a portion of their home’s equity as tax-free income. It is usually only for individuals who have fully paid off their mortgage or, in some cases, have a majority of it paid. As you probably know, with a normal mortgage a borrower pays a lender each month, but for a reverse mortgage, the lender pays the homeowner. While the money you receive is subject to interest and other fees, you do not have to pay the loan back until you are no longer living in the home you have the mortgage on. This allows you to live your life to take care of the expenses you have without worry.
Who Is Eligible?
As discussed above, these loans are for individuals who are at least 62 years old and either own their home outright or are close to finishing their mortgage payments. More specifically, the home on which you take out the mortgage needs to be your primary residence. You cannot take out this type of loan on a second home. In practice, this means you cannot live elsewhere for more than twelve months in a row. You also cannot take out a reverse mortgage on a vacation home or rental property (unless it has less than five units and you live in one of them). Finally, if you do still owe money on your home, the initial payments you receive on the loan will go towards paying off the remainder of your mortgage before you start getting the funds.
Ways You’re Paid
Depending on the type of loan you receive — based on your unique needs — there are several ways you can receive your money. You can take the funds as a lump sum if you would like all the money you want at once. This can be preferable for major life expenses, like unexpected medical bills. On the other hand, many opt for monthly advances to spread out the distribution. Another option is a line of credit with your lender. In this case, the money is available if you happen to need it. An advantage of this one is that you are only charged interest on the money you use, which allows you to potentially save more in the long run. You can also choose a combination of these payment options if you and your advisor determine that it is the best choice for your needs.
Call Us To Learn More About Reverse Mortgages
We can help you secure a reverse mortgage that meets all of your financial goals. Family Home Loan Texas was founded by loan originator and long-time mortgage professional Rob Bramer. Rob has helped clients secure the loans they need both locally and nationally and can help you get the loan you need to live life on your terms. Call 1-800-990-LEND (5363) to speak with Rob about reverse mortgage loans.