If you’re looking for a way to pay off your mortgage or supplement your existing income to help pay for things like healthcare, a reverse mortgage may be for you. Although a reverse mortgage is thought of by many people as a last resort attempt to bring in extra income, it can actually be used as an effective retirement planning tactic. But what exactly is a reverse mortgage?
A reverse mortgage is a type of loan for senior citizens over the age of 62, providing homeowners the opportunity to turn their home equity into cash. When you obtain a reverse mortgage, your home equity is used as collateral. You’ll make no monthly payments and can use the cash for making home renovations or any other necessary living expenses. Think of a reverse mortgage as an advance on your home equity. As opposed to a regular mortgage where you pay the lender every month, in this case, the lender actually pays you.
Several types of reverse mortgages available:
These loans may only be used for one purpose (home repairs, property taxes, etc.) which is specified by the lender.
You should consider this type of loan if your home has a high appraisal value. These are private loans backed by companies.
Home Equity Conversion Mortgage
The U.S. Department of Housing and Urban Development backs these mortgages. They’re federally insured and can be used for anything.
Who Should Consider a Reverse Mortgage?
A refinance mortgage doesn’t make sense for everyone. You’ll need to consider a few things before deciding to move forward with the process. First, you shouldn’t have any plans to move out of your home, as the loan will have to be paid back once you no longer live at the residence. However, if you’re planning on staying in the home and are having trouble with maintenance costs, a reverse mortgage may be a good choice. In addition, if you have other debts holding you down, you can use the cash from a reverse mortgage to help pay them off. You can even use the money to pay off another existing mortgage.
Is a Reverse Mortgage Right for You?
If you think obtaining a reverse mortgage may be the key to securing a better future, we can help. Commercial Mortgage Connection is one of the best reverse mortgage companies around and can assist you in getting the right loan for your unique situation. We have relationships with private reverse mortgage lenders and banks that will work with us in securing a reverse mortgage loan to best suit your situation. Fill out the form below to get started on your path to financial freedom through a reverse mortgage.