Reverse Mortgages can help you use the equity in your home to fund your everyday living expenses, allowing you to bridge the Social Security gap. Simply stated, reverse mortgages are a loan against the equity of your home, that will help cover the everyday costs that can make life very uncomfortable for a retiree that is on a fixed income. By using the additional income that is generated, you can supplement your Social Security income and afford the necessities in life.
Maintaining your independence. You will have the resources to take care of yourself. You can potentially eliminate the embarrassment of needing your kids to support you, allowing them to use their money for their own retirement.
You will not pass any excessive debt to your heirs. Reverse mortgages are set up to protect you and your heirs from ever owing more than your home is worth. So, in my opinion doing a reverse mortgage actually can help the kids, not hurt them.
Reverse mortgages are unique because they give you freedom to make no payments on your loan as long as you live in the home. No longer living in the home can be defined as: because of your passing, needing advanced care in a facility or just deciding you don't want to live there anymore. If there are multiple borrowers, like a husband and a wife, both would have to no longer live in the home before the reverse mortgage is required to be paid back. Furthermore, you will never be kicked out of your home. A reverse mortgage is a way to guarantee a place for you and your spouse to live. There is no prepayment penalty so you can pay off your reverse mortgage any time you like.
You get two main flavors with reverse mortgages. The most common is the government insured, FHA loan. It is known as the HECM (pronounced Heck-um) Reverse Mortgage. The second type available is a proprietary product offered at different times by a few different lenders. The purpose of the proprietary reverse mortgage is to cover loans that exceed FHA limits or don't meet FHA guidelines.
Except in rare occasions, you probably are going to want the HUD reverse mortgage since they offer the best interest rates and terms by far.
How do you know if a Reverse Mortgage is right for you?
Keep in mind that not everyone needs or should use a reverse mortgage. By answering the following questions you will be able to see if there is a fit for you.
1. Are you living the retirement you think you should be? In other words, are you really doing fine, or are you just getting by? Sitting in the dark or cold because you can't afford the bills is just surviving, not living.
2. Are you concerned about the retirement funds running dry? A lot of you are getting nervous as the funds run low. Any small emergency could wipe out your nest egg. What could be scarier than being healthy, feeling like you have several years of life left in you, but you are running short on cash reserves? Are you prepared to go out and get a job?
3. Do you want more out of life? For example, do you lack the means to travel and freedom to go out once in a while. Maybe you would like to visit the grand kids occasionally. I am not suggesting that you blow the money you get from a reverse mortgage. I am saying that you should be able to enjoy life a little bit. Let your golden years at least be gold plated.
4. Are you in danger of losing your home? Being behind on payments or taxes will not keep you from being eligible. With utility bills going higher, gas as high as it has ever been, and other expenses going up, it may be hard to stay up on your bills. Did you know that you can defer your property taxes in Oregon?
5. Maybe someone talked you into getting an adjustable loan and now it has adjusted and the payments are harder to make?
6. Does your home need repairs? You realize that you can't complete them yourself and want to hire a professional. Or maybe you need some extra cash to do a major repair like fixing the roof. We can do the reverse mortgage first to get you the money needed to do the repairs.
7. Are you cash poor and real estate rich? This is pretty common for our senior population. They have a home paid for, but no money in the bank. A paid for home could possibly allow more opportunities through this reverse mortgage program than one with a mortgage. See what you may qualify for with our reverse mortgage calculator.
If you answered yes to any of the above questions, we may a have a reverse mortgage program that will be a good fit for you. There are plenty of other reasons to use your equity to enhance your retirement and maybe you have one that I haven't heard. If so, contact us and see if there is a fit for you. See more about how a reverse mortgage works.