Is Reverse Mortgage Right for You?
According to the National Council on Aging, more than 25 million Americans ages 60 and above live at or below the federal poverty line. That’s an income of about $29,425 a year for one person. From rising housing costs to health care bills, along with little to savings left or even job loss, these seniors are having a hard time staying afloat. In the midst of all these financial troubles come options, like reverse mortgages, to offer seniors a lending hand.
Reverse mortgages are specially designed for seniors. It allows you to convert your equity into cash. The lenders essentially send you the payments, contrary to how common loans work.
The best part of reverse loans is that, unlike other types of loans, you won’t have to repay the debt for as long as you live. That is, so long as you fulfill certain conditions.
However, before you decide that reverse mortgages for seniors are the right financial step for you, make sure you can meet the following conditions:
•Home ownership. You must own a home. If you’re still paying the mortgage, the amount you owe must be small enough that proceeds from the reverse loan can cover it all up.
•The right age. Only seniors aged 62 years old and above are qualified for this loan.
•Address. You need to live in the home for the loan agreement to be in effect. If you live at another place for more than a year, the agreement becomes void.
•Costs. You’ll have to keep up with all the payments: your taxes, insurance premiums and homeowner’s dues must all be paid for. If you can’t keep up with the payments, this can render the loan agreement null.
After you meet with all these conditions, repayment of your debt will start only after you pass away or move out of the home.