Understanding Reverse Mortgages

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You’ve seen the commercials on television several times, and chances are good that if you’re a homeowner, someone has talked to you about a reverse mortgage in the past. What is a reverse mortgage, and why are so many people interested in obtaining them lately? Visit: http://www.ratewinner.com

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• Publié par: ratewinner
• Publié le: 14 juillet 2016
• Nombre de lectures: 2
• Langue: English

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Understanding Reverse Mortgages

You’ǀe seeŶ the ĐoŵŵerĐials oŶ teleǀisioŶ seǀeral tiŵes, aŶd ĐhaŶĐes are good that if you’re a homeowner, someone has talked to you about a reverse mortgage in the past. What is areverse mortgage,and why are so many people interested in obtaining them lately?

Access to Home Equity

Simply put, a reverse mortgage is a type of loan that allows individuals to pull the equity out of their homes. Commonly, older people who have retired are using this type of mortgage to help them get through the retirement years. However, anyone who owns a home and needs access to money can take out a reverse mortgage. Just like any other kind of loan, there are pros and cons associated with this type of mortgage. Understanding them can help you make better decisions for yourself and your loved ones.

Why Older People Choose Reverse Mortgages

According to the Federal Interagency Forum on Aging-Related Statistics, people age 65 and older spend about 35.4% of their total household income on housing. Furthermore, according to the Social Security Administration, the average amount of income for an individual age 65 to 74 is just a little more than $36,000. This means that the average retired senior citizen will spend well over $12,500 a year just on their housing. This is why so many retirees are choosing reverse mortgages; it allows them to stop spending so much on housing and start spending more money on enjoying retirement.

How Homeowners Get Their Money

When homeowners take outreverse mortgages, either through their own bank or a lender that specializes in reverse mortgages, they have two options for receiving their money: one lump sum or payments over time. Homeowners should keep in mind that they will receive less money overall if they choose a lump sum payment. Either way, this makes a reverse mortgage incredibly flexible. It allows homeowners to maiŶtaiŶ thiŶgs like health iŶsuraŶĐe aŶd hoŵeoǁŶer’s iŶsuraŶĐe ǁithout fiŶaŶĐial worry.

Do They Get to Keep Their Homes?

One of the most common concerns regarding reverse mortgages is homeownership itself. Many people believe that if they take out a reverse mortgage, the lender will take their homes once they pass away. This is not at all the case. However, there are a few other things to consider. •When you take out a reverse mortgage, if your children inherit your home, they will need to pay off the mortgage, usually by selling the home.

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If you move into a nursing home, you will be responsible for repaying your reverse mortgage loan. Once again, the most common way to do this involves selling the home.

Depending on your personal credit score, the interest rate on the reverse mortgage may be high; these types of ŵortgages typiĐally doŶ’t folloǁ the saŵe suď-prime rates as traditional mortgages do.

Areverse mortgagecan be a great way for some people to obtain the funds they need to live comfortably during their retirement years, but it is important to consider all of the advantages and disadvantages before making your final decision. Many people speak to their loved ones about the possible implications before agreeing to anything.