Popular Reasons For Reverse Mortgages
You’ve probably seen the advertisements on television or the internet about reverse mortgages and perhaps you wondered what they were all about. It sure sounds a bit strange. How can a mortgage be in reverse, how does it work and how can you benefit from it? A reverse mortgage, also known as a Home Equity Conversion Mortgage (HECM) is kind of like selling your house a little at a time. Seniors 62 years or older who qualify may be able to get a reverse mortgage that allows them to access the equity that already exists in their home. A reverse mortgage pays the homeowner a certain amount every month for that equity for as long as the homeowner lives in the home.
We all like the idea of receiving some extra money on a regular basis and seniors who may be having problems paying their bills or would like some extra cash to do other things might find that a reverse mortgage is something that’s worthy of consideration. In this article, we’re going to get a bit more specific about why someone would apply for a reverse mortgage and some of the more popular things people do with the extra income they receive as a result.
Believe it or not, in some cases homeowners can use the money from a reverse mortgage to pay their conventional mortgage! It sounds a bit strange, but a reverse mortgage might be a good way for those struggling to make their regular mortgage payments to meet their financial obligation.
As any homeowner knows all too well, a lot can go wrong with any property and maintenance and repair costs can be a significant drain on finances. Just about anything can fail at one time or another including septic systems, which can be extremely costly to repair replace. There are a host of other things that may need to be addressed, including peeling paint, roof repair, leaking basements, heating systems and decks to name just a few. Moe ambitious uses for the extra money a reverse mortgage can provide include major home renovations like a new kitchen or bathroom or even an addition, like that game room or study you always wanted.
These days a lot of older folks need to keep working to make ends meet and some extra money from the equity in their home that a reverse mortgage makes available could come in very handy and might allow for a shorter workweek or even the option of working a part-time job instead of a full-time job. With self-employed individuals who may not enjoy an income as steady as someone who works for a big company and has to deal with fluctuating income, the extra money from a reverse mortgage can be a real life-saver.
People who are smart about saving money know that having some money on hand for unexpected expenses can spare them a lot of anxiety and frustration when an unwelcome and costly expense comes up unexpectedly. The money from a reverse mortgage might be best used by funneling it into an emergency savings account that will allow homeowners to deal with unexpected expenses without having a serious impact on their normal budget.
We certainly don’t want to leave this one off the list. Although it may be less practical than the other ideas on this list, it’s important for most people to be able to enjoy themselves once in a while and a nice vacation or other enjoyable activities may be more possible due to the extra income that comes with a reverse mortgage. These days people are living longer thanks to advances in medicine and more awareness about living a healthy lifestyle, so there are often many years left to enjoy favorite activities after someone retires.
Mortgage Rates Remain Historically Low
Although there have been some jitters in markets in recent weeks about the possibility ofRead More
Popular Reasons For Reverse Mortgages
You’ve probably seen the advertisements on television or the internet about reverse mortgages and perhapsRead More