POST TAGSLoan Programs
Blog posted On March 23, 2023
Every year, retirement gets more and more expensive. There are several retirement solutions out there and a lot of misconceptions about each one. You may have heard the myths and the legends of a Reverse Mortgage, but do you really know what it’s all about? And why would you get one anyway?
Why a Reverse Mortgage?
A Reverse Mortgage is a unique financial tool that can turn a portion of your home equity into useable cash. Unlike other home loans, Reverse Mortgages are an exclusive benefit for homeowners ages 62 and up. Why? This is around the age that most people start receiving Social Security payments and retiring. And once you’re retired, your finances start to change.
The biggest and most obvious change is that you’re no longer getting a consistent monthly income (besides Social Security, pensions, etc.). Another consideration is that not every retiree has created a 401(k) or other sort of retirement plan. In fact, one in four Americans doesn’t have retirement savings. Then, of course, you’ll likely have to budget for certain medical expenses. According to a Fidelity Investments Retiree Health Care Cost Estimate report, the average 65-year-old couple that retired in 2022 will pay roughly $315,000 (after taxes) for these expenses.
Bottom line: retirement is expensive, whether you’ve saved for it or not. A Reverse Mortgage can give you the financial flexibility and freedom you need to enjoy the retirement you deserve.
Reverse Mortgage Overview
As mentioned, a Reverse Mortgage can be used by homeowners ages 62+ to convert a portion of their home equity into cash. You can take advantage of a Reverse Mortgage by:
When you get a Reverse Mortgage, you won’t be required to make monthly mortgage payments (borrower is still responsible for taxes and insurance) – which is a huge benefit for retirees. Housing expenses are one of the largest costs in retirement, so offsetting these can help you significantly. But overall, the repayment of the loan will be deferred until the owner dies, sells, or moves out.
You will, however, be required to continue making payments like homeowners insurance, typical home maintenance, property taxes, HOA fees, etc.
Benefits of a Reverse Mortgage
In addition to eliminating your monthly mortgage payments, a Reverse Mortgage allows you to:
Reverse Mortgage Eligibility
In addition to being 62 older, there are a few other eligibility requirements for a Reverse Mortgage. The home must be a primary residence, including 2–4-unit single family properties, PUDs, townhomes, or condos. You also have to have acceptable credit and income as well as sufficient equity in your home. If you’re not sure if your credit, income, or equity can qualify, ask us!
First, let us know you’re interest in learning more about our Reverse Mortgage program. Once we get connected, we’ll be able to give you a more in-depth explanation about how a Reverse Mortgage works, how much you can qualify for, and other loan options that are available to you. After we meet and talk through your loan, we can create a personalized loan proposal with multiple options from which you can choose. From there, we’ll give you more information about your next steps!
Curious about your Reverse Mortgage eligibility? Check out our Reverse Mortgage page to learn more.