The thought of retirement days may send shiver to some hard-working citizens. While others may think of retirement days as a time when they have the freedom to do whatever they want, which they had not had the chance to do before. For those who want to enjoy life and earn cash from a part of their home equity, reverse mortgage can be a good option. A reverse mortgage is a mortgage, designed for seniors who want to turn a part of their home equity into cash. To be eligible for a reverse mortgage, a senior must be 62 years old or older and live in the house as their primary residence. That home can be used for reverse mortgage application. A second house, a summer home, or an apartment that you bought as an investment cannot be turned into a reverse mortgage. It should be your primary residence.
The amount of cash that you can get out of your primary residence can be somewhere around 60 to 80 percent out of your home value, or sometimes more. Different loan lenders may give you different offers. The money that you get out of your home equity can be used for funding a major expense, such as finishing off your current mortgage, doing a major home renovation, going on a cruise, or having a big year if you are a bird enthusiast, among other things. Since you may want to gather information related to reverse mortgage, you should consider contacting a reverse mortgage counselor to understand the pros and cons of reverse mortgage. Just like any other financial decision, it is also best to discuss with your family members before you take any reverse mortgage.
Once your family has agreed that you take a reverse mortgage, you can browse around for information about reverse mortgage online. There are websites like Allrmc.com that have resources and articles related to the mortgage, loan calculator to calculate the value of your current residence, and many more. You can visit Allrmc.com to find reverse mortgage counselors in your area. Decide whether you want to take credit line or fixed rate reverse mortgages, as it affects the amount of money you need to pay back at the end of your loan term or in case you want to move out of your current residence. As you may already realize, your heir will be the one who pays back the loan in case every senior living in the property has passed away before the end of the loan term. In case the person does not have the means to pay back the loan, it will be foreclosed.
In reverse mortgage, you keep the title of your house and you still need to pay for insurance and homeowner taxes. Hence, taking a reverse mortgage is a great option if you want to keep the house, live in it, and hold title of the property, while getting some money for your retirement days. You can choose reverse mortgage credit line if you want to get the money not in the form of a lump sum, so it is like getting extra income each month for a period of time. Currently, the fixed rate reverse mortgage is very low, almost the same as the adjustable rate. So, if you are interested in getting fixed rate reverse mortgage, it is a good time to apply for one. Contact a trusted reverse mortgage counselor, get all the details explained to you, and decide if reverse mortgage is right for your retirement days.