mortgages can provide senior citizens with the money they need without
adding another monthly payment to their budgets. They can be used at
the recipient’s discretion, funding home repairs, preventing
foreclosure, providing extra monthly income, or providing money for any
As with any lending arrangement, there are pros and cons to a reverse mortgage. Here are some of them:
can get the money you need without placing an additional burden on
yourself each month. A reverse mortgage does not have to be paid back
until the homeowner moves out, sells the home, or dies.
have several options to choose from regarding how you receive your
money. You can receive the proceeds from your reverse mortgage in a
lump sum, in monthly payments, or as a line of credit from which you
may borrow as needed. You can even combine the options to have a line
of credit and a monthly payment, a lump sum and a monthly payment, or a
lump sum and a line of credit. This allows for great flexibility to
meet your specific needs.
is no monthly income requirement. Traditional mortgages require
recipients to make a certain amount of money each month so that they
will be able to make their monthly payments. But because a reverse
mortgage requires no monthly payments, no income requirements exist.
You can have $0 in monthly income and still qualify for a reverse
amount owed can never exceed the value of your home. In some situations
you can borrow more money than your home is worth, but your debt will
never exceed that amount.
loan must be repaid in full when the owner ceases to occupy the home.
You will have to pay back the mortgage if you ever move out. If you die
while still living in the home, it will probably have to be sold to pay
off the mortgage. That means that you can’t leave it to your children
or anyone else.
If you still owe on your original mortgage, you
will probably have to pay it off in order to obtain a reverse mortgage.
Most reverse mortgage lenders require that the reverse mortgage be in
the “first lien” position. If your equity is sufficient, you may be
able to use funds from your reverse mortgage to do this, but it will
reduce the amount of money you receive from it.
If you receive
Medicaid, the funds you receive from a reverse mortgage could affect
your eligibility. This can usually be avoided by only getting the money
you need immediately from the reverse mortgage and spending it in the
month in which you receive it. Otherwise, it will count toward your
Defaulting on the reverse mortgage could cause you
to lose your home. If you have already paid off the original mortgage
on your home, you don’t have to worry about foreclosure. Getting a
reverse mortgage puts a new lien on your home, and you could lose it if
you default on the mortgage’s terms.
A reverse mortgage could be
the answer to your financial difficulties if you are a senior
homeowner. But it bears careful consideration before going forward.
you would like more information about the reverse mortgage process and
how it can possibly help you live out your retirement without the
stress of financial burdens please call me or one of my team members at
561-316-6800 or send an email here: TheMortgageTeam@ChristianPenner.com
will be happy to provide a complete complimentary analysis of the
amount of money you could expect to receive from the best available