Is a Reverse Mortgage a Good Option for You?
There can be some challenges that come with growing older and maintaining your home at the Lake of the Ozarks. A reverse mortgage is an option for homeowners 62 years and older with little or no mortgage debt, and live in the home where they are seeking their reverse mortgage. Below we answer some basic questions regarding a reverse mortgage:
How Much Can You Get?
What is A Reverse Mortgage?
A reverse mortgage is a type of home equity loan for older homeowners that does not require monthly mortgage payments. The loan is repaid after the borrower moves out or passes away. Retirees typically use cash to supplement income, pay for health care expenses, pay off debt or finance home improvement jobs.
Who Benefits From a Reverse Mortgage?
Reverse mortgages enable seniors 62 and older to access a portion of their home equity. There are a lot of reasons that motivate people to get a reverse mortgage including unexpected home expenses or a health care condition. The bank makes payments to the borrower throughout his or her lifetime based on the percentage of accumulated home equity. The loan balance does not have to be repaid until the borrower dies, sells the home, or moves out. It benefits people who:
- Don't plan to move
- Can't afford the maintenance costs of their home
- Want to access the equity in their home to supplement their income or have a nest egg available
How Much Can You Get?
There are several factors that influence how much money you are eligible to receive through a reverse mortgage. To be eligible for a reverse mortgage you must either own your home outright or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan. Typically, the older you are and the more valuable your home, the more money you can get. Some factors that influence the loan amount include:
- Age (or the age of the youngest spouse in the the case of a couple)
- Value of the home
- Interest rate
- Lessor of appraised value or the HECM FHA limit of $625,500
What Are the Costs?
If you decide to get a reverse mortgage loan, you can expect to pay higher-than-average closing costs based on the value of your home, as well as origination fees, mortgage insurance, and appraisal fees. The interest rate can be higher than that of a traditional mortgage. In addition, you will also still be responsible for paying property taxes, insurance and repairs on your home. Keep in mind, spending the equity in your home, also diminishes the value of your estate, leaving you less to pass on to your heirs.
Devine & Associates Has Your Best Interests in Mind
If you or someone in your family could benefit from a reverse mortgage, contact Devine & Associates and we can refer you to a mortgage professional that can find a loan that makes sense for you. Devine & Associates Real Estate specializes in home sales localized in the Eldon real estate market, as well as Miller, Morgan, and Camden counties. Our team goes above and beyond to serve our clients in all aspects of real estate!
Devine & Associates Real Estate
Devine & Associates Real Estate
Comments
Post a Comment