|
Home Equity Loan-Reverse Mortgage-Is There One in Your Future
J Krohn
Reverse mortgages have gotten a lot of publicity lately and will probably get a lot of press in the future as baby boomers near retirement age. What are they? Who can use one? Is there a reverse mortgage in your future?
WHAT ARE REVERSE MORTGAGES A reverse mortgage is a home equity loan or line of credit that is secured by the equity in your home. You do not repay as long as you live in the home. The reason it is called a reverse mortgage is because it is the opposite of a regular home equity loan where you reduce debt and build up equity. In a reverse mortgage you reduce equity and build up debt. That is where the money comes from.
WHO CAN USE REVERSE MORTGAGES Basically anyone who is over age 62, owns and lives in their own home and has paid off at least 60% of the loan can apply for a reverse mortgage. There is no proof of income requirement.
USES FOR PROCEEDS The money can basically be used any way you wish. Frequent uses are travel, home improvements, medical expenses, and supplemental income. The amount you may receive depends on a lot of factors one of which is how you receive the money. Your age, the location of the home, interest rates, the type of program you select, and of course the values of the home are some of the other variables.
OPTIONSYou may select to get monthly payments, a lump sum upfront, or a line of credit that would allow you to draw on the account as you needed it or a combination of the three. If you select a line of credit with a "growing" credit line your available balance earns interest. A withdrawal at the beginning of the plan could be offset by the interest earned.
Since you still own the home you are responsible for taxes, insurance, and upkeep. The loan has to be repaid at the death of the owner, when it is sold, or if you move. The proceeds from the sale of the house can be used to pay off the loan.
Reverse Mortgages have become increasing popular in the last several years and will only grow in popularity as the baby boom market looks for ways to finance their retirement.
AARP has some very good information on reverse mortgages at www.aarp.org
|
- Reverse Mortgage: An investment for your future
As seniors today grow into retirement, more and more are finding that their savings and retirement plans are less and less unable to cope with the rising cost of medical services, inflation, and the burden...
- What is a Reverse Mortgage?
Simply stated, a reverse mortgage is a loan that enables homeowners (age 62 and older) to convert part of the equity in their home into a tax-free income without having to sell the home, give up the title,...
- Home Equity Loan Pitfalls
The home equity loan came of age in 1996 when changes in the tax law eliminated deductions for the interest on most consumer purchases. Interest paid on home equity loans, however, remained exempt, up...
- Home Equity Management Plan
Copyright 2006 Margaret NtifoDepending on your individual financial circumstances, there are attractive and appealing reasons for releasing your home equity for investment purposes. In fact, when left...
- Reverse Mortgage Maximization
Have your home's appreciation grow twice as fast.For Seniors over the age of 62 a Reverse Mortgage is a tool that, while new to many, is increasingly being used to maximize their retirement income. A Reverse...
- How Wells Fargo Home Equity Loans Work
Wells Fargo & Company is a specialized financial services company based in San Francisco, and is a provider of insurance, mortgage, investments, banking, consumer finance catering to more than 23 million...
- Consider Different Reverse Mortgage Options
There are many different reverse mortgage options: single purpose reverse mortgages, federally insured reverse mortgages, and proprietary (private sector) reverse mortgages. Each option has different pros...
- Reverse Mortgages
Don't Consider Cashing in your Home's Equity Until You Read This!As an older american you can turn to a "reverse" mortgages to seek money to pay off your current mortgage, finance a major home improvement,...
- Home Loans and Mortgages - Time to Consolidate Loans?
Home equity loans and lines of credit are useful tools for homeowners. They allow the homeowner to borrow against the value of his or her home for all kinds of purposes - home improvement, debt consolidation,...
- Reverse Mortgages Fees
Majority of the costs paid by someone to get a home purchase loan, existing mortgage refinancing are the same fees paid in reverse mortgages. In most cases, capping and financing these fees and costs can...
|
| | |
