If you are younger than 62 years old, a Reverse Mortgage would have no benefits as you do not qualify for a Reverse Mortgage; if you are 62 years or older, then the benefits can be limitless. A Reverse Mortgage can be a vital lifeline if you are stuck on a fixed income, and your home is either paid off or almost paid off. When you apply for a Reverse Mortgage, you are taking the accumulated value of your home, and getting the funds, you need to pay for living expenses, healthcare costs, or even paying off the remainder of your current mortgage. With the max amount for borrowing currently set at $417,000, Reverse Mortgages are quickly becoming the most popular equity loan types available. Also, Reverse Mortgages are FHA-insured, even if the originating lender was not an FHA-lender. That means that if you are ever unable to make a payment or your home sells for less than the balance of your loan, the insurance fund will pay off the remaining balance.
Some of the other benefits of Reverse Mortgage include, but are not limited to:
There are no restrictions on how you choose to spend the proceeds from your Reverse Mortgage. Whether you use the money to pay medical expenses, bills or buy a fishing boat, your tax-free disbursements are yours to spend as you wish; just remember that you have to keep up with property taxes, homeowner’s insurance, and any applicable community fees.
If you were to pass away during the term of your loan, whether before or during repayment, your debt will NOT transfer to your estate. If there is a balance owed at the time of death, the bank will take its portion of the payment required, and any remaining payout will be disbursed to your surviving heirs; you will never have to worry about leaving your loved ones to bear the burden of your mortgage debts.
You will never owe more than your home’s value, at the time your loan is to be repaid, even if the amount of the Reverse Mortgage funds you received were more than the value on your home.
With a Reverse Mortgage you don’t have to make any payments on the loan, as long as you are residing in your home. If you sell your home or vacate for any reason, the loan will default, and repayment will begin immediately. The only other time your loan will default, is if you do not keep up with property taxes, homeowner’s insurance or community fees. Failure to maintain these payments will also result in “default” status, bringing the loan into repayment status.
By using the accumulated wealth in their homes, many seniors are now able to pay their bills, cover basic living expenses, or pay for current and future healthcare without fear of foreclosure or bankruptcy.
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