Did you know that individuals seeking reverse mortgages are at an all time high? Though there are benefits of arranging this type of loan in your retirement years, it’s important to understand all the facts before making such an important decision. To help you better understand reverse mortgages, we’ve put together some key considerations below.
What Is A Reverse Mortgage?
In short, a reverse mortgage is a loan that you take out against the equity you’ve built up in your home. Instead of making monthly payments to the bank, a financial institution makes that same monthly payment to you. The equity in your home can still appreciate, and you receive a stable income stream for the term of your arrangement. To be eligible for a reverse mortgages, you have to be at least 62 years of age or older. Though the amount of cash that you’re able to receive depends on your age, amount of home equity, and prevailing interest rates, the general rule of thumb is that the oldest applicants with the most expensive homes generally qualify for the biggest loans.
If you’d like to learn more about the specifics of a reverse mortgage, there are a number of other resources available on the web. You can also consult with your financial advisor to determine whether a reverse mortgage makes sense in your overall financial plan. Additionally, you should also consider how you anticipate using the money, how long you plan to live in your home, and what your other options are.
How will you use the money?
Since the payments received from a reverse mortgage draw down against the equity in your home, which is likely your most valuable asset, it’s important to use the money wisely.
How long do you anticipate living in your home?
People who make the best candidates for reverse money mortgages are individuals who plan on staying in their homes for at least seven years.
Is a reverse mortgage my best option?
Though reverse mortgages are appealing for a number of reasons, it’s important to be thorough when considering a reverse mortgage and when selecting a mortgagee. Compare rates and terms from several banks before finalizing your reverse mortgage to make sure you’re getting the best rate.
If you’re considering purchasing a retirement home but have yet to explore all of your options, we invite you to learn more about Tribute Homes. With several active adult communities in both Charlotte, North Carolina and Columbia, South Carolina, we offer homes in settings that match almost any lifestyle. To speak with our sales associates about your options, you can contact us directly by calling (800) 381-2984 or visit us on the web at www.tributehomesusa.com.
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