4 Signs You Should Consider Reverse Mortgage Loans
Paying off your mortgage is an amazing accomplishment. Not needing to pay a mortgage during retirement means you have more money at your disposal. However, you might still feel the need to tap into the equity of your home to access even more capital. Maybe you need to make repairs or pay for medical expenses. Whatever the reason, reverse mortgage loans are worth looking into.
4 Signs You Need A Reverse Mortgage Senior Loan
While approval isn’t guaranteed, it’s significantly easier to qualify for. So, here are four signs it’s worth investigating further.
1. You Are a Senior
This method of tapping into home equity isn’t accessible to everyone. It was specifically created for seniors who are 62 years old or older. However, it’s best to wait until you’re much older to tap into the equity in your home. If you take the opportunity when you’re too young, you might not have the money when you really need it later on.
2. Your Home Is in Great Shape
When you take out a reverse mortgage on your home, the property becomes collateral. So, the lender will require that it’s in good shape. Failing to meet this standard does not mean an automatic denial. Your lender might tell you what to repair for approval.
3. Your Mortgage Is Paid Off or Close
You don’t need to wait until you pay off your mortgage to apply. If you have a small balance, you might still qualify. However, you will need to pay off the remaining balance when you close on the loan.
4. You Have a Good Reason
When you purchased your home decades ago, you likely did so knowing it would be an amazing investment. It likely appreciated in value and allowed you to cash in on your investment. However, once you take out a reverse mortgage, that’s the bulk of its potential cashed out. Here are some good reasons:
- Purchasing a second home to generate passive retirement income
- Investing in a plausible business idea with a legitimate chance of success
- Paying for necessary repairs on your home
- Paying off large sums of high-interest debt that someone else co-signed on
4 Important Benefits of Reverse Mortgages
Before settling on reverse mortgages, you probably considered several other options, such as home equity loans and refinancing. While they provide similar benefits, the qualification process is much harder.
1. No Income
Unlike all other available options, you don’t need to show proof of income. You may only need to show you can pay taxes and insurance on the home.
2. No Credit
You don’t need good, excellent or any credit to get a reverse mortgage. Banks generally consider the fact that you paid off your mortgage a sign of being a low-risk borrower.
3. More Liquidity
Owning assets is great, but they are cumbersome financial tools when you need cold, hard cash. A reverse mortgage helps you access the gold mind you’re currently sitting on in your home.
4. More Flexibility
You don’t need to literally cash out the value of your home. Instead, you could choose a line of credit or take monthly payments.
Do you need more information to see if a reverse mortgage is right for you? Have you decided to apply? Contact us today.
Sources:
- https://www.consumerfinance.gov/ask-cfpb/can-anyone-apply-for-a-reverse-mortgage-loan-en-227/