As with anything in life, there are both pros and cons of getting a reverse mortgage. A reverse mortgage allows you to withdraw some or all of the equity in your home, so you can use it for funding a vacation, your retirement or whatever need you may have. If you are considering a home equity loan, it is important you research as much as you can, so you can have a good idea of what to expect from the process. This will allow you to make the best decision for your financial needs.
If you want to learn more about a reverse mortgage, it is a good idea to start with the pros. This type of mortgage allows you to withdraw equity from your home and reverse mortgage guide receive your money in one lump sum payment, monthly payments or in an account you can withdraw from as you need to.
The best part of getting a mortgage of this type, is you never have to repay the money, as long as you live in the home and do not sell it. All you are required to do, is keep paying the taxes and homeowners insurance on your home. You get to use the money for whatever you like, without worrying about paying taxes. As long as you are age sixty-two and older, you may qualify.
The down side of getting a reverse mortgage, is you must have at least forty percent of the value of your home in equity. If you owe a mortgage on your home for over forty percent of its value, you will not be able to be approved for this type of mortgage.
If you plan on leaving the home to an heir, they will be responsible for paying the debt for the mortgage. This is typically done when the heir sells the home. If the heir decides they want to keep the home, they will need to make arrangements to pay the full balance owed, before taking over ownership.
By weighing the pros and cons of a reverse mortgage, you can learn more about what to expect, so you can make the best decision. A reverse mortgage can give you the money you need, to be able to enjoy your retirement, with less financial stress.
