Are you over 62? Have you been wishing you had a way to access your home equity? Have you considered a reverse mortgage? If you are happy with your current residence and not planning to move again, strongly consider reverse mortgage. The extra cash allows you to get the most out of your retirement.
Today’s home ownership is rarely the investment that you expected it be when you first bought, but that doesn’t mean that it should only be a slow monthly drain on your income and savings. Loan companies specializing in reverse mortgage make the process simple and straightforward, allowing you to access your equity. The boost in cash on hand can let your retirement resemble what you had hoped it would be when you started saving. A reverse mortgage has historically been sought to pay off a current mortgage, initiate a home improvement project, or cover health care.
There are different types of reverse mortgage loans, similar to conventional mortgages, including a fixed-rate (known as the Standard Fixed Rate HECM), a lower-cost, fixed-rate mortgage (the “Saver” plan) and a variable-rate. However, this year the FHA eliminated Standard Fixed Rate HECMs, which have higher upfront fees and more generous loan amounts.1 Instead, the FHA now only allows “Saver” plans for fixed-rate mortgages, which charge lower fees but offer 10 percent to 20 percent less payout than standard mortgages.
Make sure your mortgage lender explains all of your financial options when seeking a loan. They need to disclose information about the financial implications of a reverse mortgage. Because a reverse mortgage is a huge investment of assets it is important to seek a qualified lender with a good track record of guiding clients through the process. Online reverse mortgage calculators can help you get an idea of how valuable a reverse mortgage loan may be to you. In today’s economy they are undoubtedly a valuable option for homeowners.