Reverse Mortgage Program
A Reverse Mortgage is a great tool that 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.
Reverse mortgages are unique because they give you freedom to make no payments on your loan until you no longer live in the home. No longer living in the home can mean because of your passing, needing advanced care in a facility or just deciding you dont 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 it was required to be paid back. Furthermore, you can not ever be kicked out of your home. It is a way of guaranteeing a place to live for the rest of you and your spouse's life. There is no prepayment penalty so you can pay it off any time you like.
Reverse Mortgages come in two main flavors. The most common is the government insured, FHA loan. It is known as the HECM (pronounced Heck-um). The second type available is a proprietary product offered at different times by a few different lenders. The purpose of the proprietary mortgages 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 HECM loan 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. Answer the following questions to see if there is a fit.
1. Are you living the retirement you think you shou
ld 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 travel and freedom to go out once and a while. Maybe you would like to visit the grandkids once in a while. I am not suggesting that you blow the money. I am saying that you should be able to enjoy life a little bit. Let you 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.
5. Maybe someone talked you into getting a 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.
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 will allow more opportunities through this program than one with a mortgage.
If you answered yes to any of the above questions, we may a have a 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 havent heard. If so, contact us and see if there is a fit for you.
Want to dig a bit deeper? Follow the link to more in depth information. Redwood Financial Services is committed to providing excellent service and looks forward to assisting you.