Is A Reverse Mortgage The Best Option?

Are reverse mortgages the best choice for seniors? Are they the best option for you? Here are some positives and negatives about reverse mortgages to help your decide if the choice is right for you.

Can anyone benefit from a reverse mortgage?

These mortgages can be helpful for many people but they are not a choice for everyone. Carefully research the terms, alternatives and costs before you sign for one. Remeber that you also have to be 62 years of age and use the home as your primary residence.

Do I have to pay taxes on the money each year? Do I get the money from the mortgage all at once?

Reverse mortgages do provide a source of tax free income for the rest of your life and you can choose how to receive that money. You can get it in a line of credit, a lump sum, monthly payments or a combination of all three ways. These mortgages also have fees, insurance and closing costs that may apply.

What happens when I die? Can I leave the house to whomever I want?

While reverse mortgages allow you remain in your home you can not owe more than the value of your home at the time of repayment. You do not have to own your home outright to qualify though. You do have to be 62 years old.

If the balance on the reverse mortgage is less than what the house is worth when you die, your heirs get to keep the difference when it’s sold. You can choose to repay your reverse mortgage at any time if you so choose.

Does this extra money affect my government benefits?

The income that you receive from a reverse mortgage will not affect your Social Security payments or Medicare benefits. The income may affect your Medicaid and Supplemental Security benefits if you receive these.

What do I have to do to qualify? Do I pay it back while I’m alive?

You no longer have to make monthly payments with a reverse mortgage like you would if you were to take out a home equity line of credit. Ownership and title to the house remain in your name.

Your income, savings, and credit score are not used as qualifying criteria for a reverse mortgage. Things like your age, health, and house value and equity are used instead. You are also required to meet with a reverse mortgage counselor before you get the loan.

You have three days after the loan closes to cancel for any reason. After three days pass, the loan is final. Refinancing a reverse mortgage is hard and expensive.

Related posts

1. How Do I Get My Funds From a Reverse Mortgage?
2. How Is A Reverse Mortgage Different?
3. What are the Similarities Between a Reverse Mortgage and a Home Equity Loan?
4. Is There A Choice How I Receive My Cash From A Reverse Mortgage?
5. How Does A Reverse Mortgage Work?

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