Reverse Mortgage - Is it For You?As we grow old, say in our retirement age, we usually just end up staying home alone or if you are lucky, you still have your partner or a grandchild with you. Being at an age where you are just usually idle and does not really have anything to do and have something to earn from makes you think of things like travelling, doing your lifelong dream of having a business or just go somewhere where you can be happy. Being old sometimes also means that you have nothing much to do and no income to expect. You probably have a pension but it really is not enough to pay for your dream vacation.
Many old people are struggling to find money to do the things they have not been able to do before because they are to busy making ends meet, but now, you can have an alternative to have the money you need!
A reverse mortgage is a special type of home loan that allows you to exchange your equity into cash. Unlike the usual home equity loan, the payment is not collected if you are still using your home as your primary residence. Meaning, the chance of you getting kicked out of your home is most unlikely. If your home is a one unit home or an apartment-style that 2-4 divisions and one part is occupied by the owner, you can be eligible for the loan. Also, this loan caters to 62-year-olds and up.
The payments you get from your reverse mortgage loan can be availed in several options:
=B7 Tenure =96This option allows you to have equal monthly payments as long as you still live in the house as your primary residence.
=B7 Term =96This option will also allow you to have monthly payments from the bank but will be able to decide in the number of years.
=B7 Line of credit =96This option will allow you to withdraw money without schedule. Meaning you can withdraw when there are emergencies or when you decide to indulge yourself as long as your credit balance still allows withdrawals.
=B7 Modified tenure =96This option is the combination of tenure and line of credit. Meaning, you can have monthly payments but you will also be allowed to withdraw anytime incase some financial emergencies emerge.
=B7 Modified term =96This type of option is the combination of line of credit and term. Therefore, you can have monthly payments in your desired length of time and will also be allowed to withdraw additional money anytime.
The reverse mortgage loan is really an attractive option for retirees, but they also come with consequences. When you avail of this loan program, and you are not using it as a primary residence anymore, the house will be sold if you are unable to pay. The money gained from selling the house will be used to pay the lender plus the interest and other fees. So, if you plan to have a reverse mortgage, it is best if you ask question first from a friend or better yet, a lawyer who will be honest to you and tell you all the pros and cons of the reverse mortgage loan.
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