subject: Reverse Mortgage: Who Can Benefit From it and How? [print this page] Reverse Mortgage: Who Can Benefit From it and How?
Reverse mortgage is a finance tool meant for the aging population in the US. It lets seniors access the equity in their homes, basically for cash. Equity here is the difference between a property's market value and the amount owed. Homeowners normally realize equity when they sell their property and the funds are dispersed. With this concept, seniors can access the equity in their homes while still staying in it.
Who Can Benefit from Reverse Mortgage and How?
Retired people can benefit from reverse mortgage, as they typically need additional cash flow for their living, especially if they do not have a regular means of income. One should be at least 62 years of age to access and benefit from it. It allows one to live in one's home and postponing the monthly loan payment until the owner moves, dies or the property is sold. Once the house is sold, the amount owed is deducted from the selling price, before being paid to the estate.
Seniors can use the equity for the following purposes:
Long-term care needs
To pay bills
High property tax bills
Pay off existing debt
Pay for prescription drug costs
To fund advanced estate planning techniques
Home improvements or modifications
Assisting grandchildren with college funding
Making charitable donations
What You Must Know About Reverse Mortgage?
There have been instances where senior citizens were tricked into accessing equity in their homes through misleading advertisements and were forced to move out of their homes. Strict laws have been formulated to check such criminal practices. This includes limiting the amount to 40% of equity in the home.
The person living in the home gets the payment. Inspections are carried out in the home to check its condition. Insurance and property taxes must be paid on regular basis and a lapse leads to violation of the terms of the agreement, forcing the lender to call in the mortgage.
Finally, do ask about the various fees and costs associated with it. To New Jersey reverse mortgage aid informed decision making, contact IvyLeagueMortgage.com. The company's virtual loan officer is always there to help you throughout the process.
