Reverse Mortgages Provide Additional Income, Security for Seniors
According to the Administration on Aging, one-third of Americans age 65 and over depend on Social Security benefits for approximately 90 percent of their income. However, these senior homeowners may have an opportunity to live a more comfortable and financially independent lifestyle by securing a reverse mortgage on their home.
What is a reverse mortgage? A reverse mortgage is a loan that allows seniors to convert the equity in their homes into income. The borrower retains the title of the home and will never owe more than the home is worth, while receiving either a monthly installment or a lump sum of money borrowed against their home. The money can be used for almost anything: paying for prescription drugs, receiving in-home caregiving services, funding home repairs, travel or paying off a current debt.
Who is eligible for a reverse mortgage? Homeowners aged 62 years or older are eligible for this loan. Qualifications such as income, credit or health are not taken into consideration. Seniors currently paying off a first or second mortgage also may be eligible.
How much money can I receive? The borrower’s age, the value of the home and the current equity in the home are just a few of the factors that determine much how money the homeowner will receive. Generally, the older the borrower is, and the higher the appraised value of the home, the more money he or she is eligible to receive.
Additional information regarding reverse mortgages is available through financial advisors or AARP (www.aarp.org/money/revmort). If you are considering a reverse mortgage, be sure to do your homework and make informed decisions. Work with a credible lender, such as Financial Freedom™, who will allow you to select the most appropriate reverse mortgage product from a number of choices, and who assures that the industry-mandated counseling session with an impartial HUD-certified advisor occurs before the loan closing.
Article Provided by:
Rob MacNaughton, Managing Director
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