A reverse mortgage is a financial product that's specifically designed for homeowners who meet certain age requirements. This product allows homeowners to convert a portion of their home equity into loan amounts, which offers them a source of income during their retirement years. The reverse mortgage allows them to receive loan proceeds that won't need to be repaid until they move, sell the home, or pass away. In many cases, the loan balance will end up being repaid from the proceeds of the home's sale. If you're close to retirement age, or already there, then you should learn about the advantages of a reverse mortgage. This article will discuss some advantages they can offer so you can determine if it's a good way for you to go.
It offers supplemental retirement income: Since the reverse mortgage will provide additional money during retirement, it can serve as additional income once someone qualifies for it. The loan proceeds the homeowner gets will generally be tax-free, and this additional income can be used any way the homeowner chooses. Some common ways it's often spent include help with regular living expenses, medical expenses, and more.
There's no monthly mortgage due: A big advantage of taking out a reverse mortgage is that the borrower won't have to make regular mortgage payments as long as the home is still their primary residence. Since they won't have to worry about repaying the loan until the home sells or they move from it, and they'll be receiving money regularly, the reverse mortgage can really help alleviate the financial burdens of someone financially struggling through their retirement years.
The borrower will retain the ownership of their home: Some people are under the misconception that reverse mortgage borrowers will have to give up ownership of their homes. However, this is not the case and as long as they live in the home and maintain the property, they remain the owner and can benefit from the home's appreciation.
Reverse mortgages offer flexible options: Something else that's great about reverse mortgages is they offer flexibility when it comes to how the borrowers receive their loan proceeds. They can choose a line of credit they can access when they need funds, choose to receive a single payment, go with regular monthly payments, or opt for a combination of these options. This allows homeowners to choose a customized loan that meets their individual needs the best.
For more information on reverse mortgage loans, contact a professional near you.
Share12 June 2023
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