Top 10 Reasons why Seniors in Lake Forest consider Reverse Mortgages
- Help your family out: You will be in a better position to help pay for college, provide monetary assistance or just travel to see your family more often.
- Renovate or repair home: Get that roof fixed, complete the basement and add rooms or upgrade your home as you’ve always wanted to do. With the right amount of funds in place, this is possible in a reverse mortgage scenario.
- Consolidate debt: If you have piles of high interest debt, you can easily pay them down or off in full, freeing up your credit as well as budget.
- Free up your budget: With a surplus of funds, you won’t have to fret nearly as much about your daily budget as you would normally have to do, and you can afford to go out to eat more and pay for expenses that pop up.
- Get rid of mortgage payment: A lot of older Americans use the reverse mortgage to get rid of their existing mortgage payment, which frees up a large amount of monthly funds and helps them better balance their budget.
- Enjoy the finer things in life: If you have been putting off your dream vacation on your bucket list, with these extra funds, you can finally pursue your dream.
- Be prepared: With a nest egg stashed away, you will be ready for whatever life brings you, and those stressful, out-of-nowhere expenditures that can arise.
- Better manage disability: If you suffer from a disability, the extra funds from a reverse mortgage can help you to better modify your home and personal care routine with more efficient devices and aids.
- Get caught up on taxes: Back taxes can really take their toll with interest rates and penalties that add up fast. With the right amount of funds, you can say goodbye to the tax man once and for all!
- Start a small business: So now that you’re retired and you have all that time on your hands, Are you ready to finally start that business you dreamed of? A reverse mortgage can be a great way to fund it.
MORE DETAILS: A reverse mortgage is a loan available to seniors, and it’s purpose is to release the home equity in the property as one lump sum or multiple payments. The homeowner’s obligation to repay the loan is deferred until the owner dies, the home is sold, or the owner leaves the property (example: into aged care).
In a traditional or conventional mortgage, the homeowner makes a monthly amortized payment to the lender. After each monthly payment the equity increases within his or her property, and typically after the end of the term (example 15 or 30 years) the mortgage has been paid in full and the property is released from the lender.
In a reverse mortgage, the home owner makes no payments and all interest is added to the lien on the property. If the owner receives monthly payments, or a bulk payment of the available equity percentage for their age, then the debt on the property increases each month.
Reverse Mortgage Highlights:
- Must be at least 62 years old
- House must be primary residence
- Mortgage must be either fully paid or have a small balance
- No income or credit score requirements
- Payment can be a lump-sum, monthly cash payout, line of credit held in reserve, or combination of all three
- In many states, including California, a senior can use proceeds for purchase of a new home
Frequently Asked Questions:
Q: Can the lender take my home away if I out live the loan?
NO. You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keeps the taxes and insurance current.
Because of the conservative loan to value used for your reverse loan you will never owe more than the value of the property at the time it is sold.
Q: How much money can I get from my home?
The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA’s mortgage limits for your area, whichever is less.
Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.
Q: Will I still have an estate that I can leave to my heirs?
When you sell your home, you or your estate will repay the cash you received from the reverse mortgage plus interest and other fees, to the lender.
The remaining equity in your home belongs to you or to your heirs.
Do you have questions about if a reverse mortgage in Lake Forest is right for you? Contact Jackie for a No Cost, No Obligation Consultation at 949 600-0944.