Are your parents struggling to make ends meet with their retirement income? Many homeowners are taking advantage of reverse mortgages as a means of being able to live more comfortably during their retirement years. A reverse mortgage offers individuals aged 62 or older to tap into the equity in their homes as a means of supplementing their monthly incomes.
Getting a reverse mortgage does not involve selling the home, nor does it require the homeowner to take on a new monthly payment. With a reverse mortgage, instead of the homeowner paying the lender, the lender pays the homeowner. Reverse mortgages can come in very handy for helping with day-to-day living expenses, as well as with unexpected and emergency expenses.
Your parents could receive additional income each month with a reverse mortgage. Some individuals opt to receive their reverse mortgage payments in a lump sum instead of monthly payments, and others choose to set their funds up so they can simply draw against them as needed. A reverse mortgage can help with daily living expenses, or with the unexpected such as medical bills or emergencies such as car or home repairs.
Reverse mortgages are available for individuals who still have a mortgage on their homes, but are best used in situations in which a homeowner has outright title to his or her dwelling. When there is no prior debt on the home, homeowner is able to draw against the full value of their real estate.
Reverse mortgages are still loans, and do have to be paid back. If your parents were to move out of the home, sell their home, or pass away, the loan would have to be repaid in full. Assuming the home sells for the amount owed, or more, the loan is simply repaid from the proceeds. The element of risk comes in here. If the home sells for less money than is owed on the reverse mortgage, alternative arrangements will have to be made for repaying the remainder of the loan.
For individuals in the right situation, reverse mortgages are an ideal solution to post-retirement living. For individuals who plan to sell their home within a few years, it may not make financial sense to take out a reverse mortgage due to the upfront costs. However, if you are parents are in good health and plan to stay in their home for the rest of their lives, a reverse mortgage may be a great solution for supplemental income.
Your parents probably worked very hard to build equity in their home, so it is good to know that they have an option to put that equity to use during their retirement years. The decision about a whether or not a reverse mortgage is right for your parents lies with them. It isn't your decision, but by becoming knowledgeable about how reverse mortgages work, you can be of great assistance to them as they investigate their options and make their final decision.
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Article Source: http://EzineArticles.com/?expert=Joshua_Suffie
In the financial world, going in reverse can mean gaining ground! By using a Reverse Mortgage, many seniors are getting money out of their homes by using equity to earn a tax-free income. If you own a home or condo worth $ 100,000 +, a Reverse Mortgage can be a major benefit. With real estate values continuing to drop, now is the time to take advantage of the various Reverse Mortgage programs before property values drop further. "For many seniors their home is the largest asset," said Stu Naar, Branch Manager for US Financial Mortgage Corp. in Boca Raton, Florida, and "although many shudder at the thought of borrowing on it, a home is a viable way to increase monthly income, providing extra cash for future stability."
As Reverse Mortgages gain in popularity, we now have more programs to offer with Fixed Interest Rates, and loans for 2nd homes. The reverse mortgage doesn't have to be paid until the homeowner sells the home or passes away, and the title to the home will remain in their name. Many people are confused about this product line. "Even if you have a current "forward" mortgage, the reverse mortgage may be the answer because the current mortgage would be paid off and you would still have additional savings," remarked Naar. There are 4 "Nevers" to keep in mind with a Reverse Mortgage.
1) You NEVER make a payment while living in the home.
2) You NEVER give up title to YOUR home
3) You are NEVER forced to move out
4) You and your estate can NEVER owe more than the value of the property at the time of sale.
A reverse mortgage is not only for homeowners that are financially strapped; it is also a means of improving a senior's quality of life. This is without a doubt, a true "Financial Strategy" that seniors should consider, especially if they are planning on staying in the property for at least 3-4 years or more.
Most banks are not originating Reverse Mortgages, since their profit is realized only when the loan is paid in full at the time the owners decide to sell the property. The homeowner does not make any monthly payments on the money taken with a Reverse, and pays off the total whenever they are ready. There are myths about Reverse Mortgages that need to be dispelled and explained to all potential clients prior to them proceeding. Mortgage companies originating this product have an obligation of Integrity and Honesty in providing the best possible advice to clients to tell a prospective client whether or not the Reverse Mortgage is in their best interest, based upon their individual circumstances.
As Reverse Mortgages gain in popularity, due to the ever increasing cost of living, Senior's are investigating this product thoroughly, making sure that the Lender they select is practicing a very rigid Code of Ethics, and has a good rating with the Better Business Bureau. You hear too many horror stories about unethical Mortgage Loan Officers and Brokers attempting to deceive people with "bait and switch tactics." Because of this increase in popularity, the addition of the Fixed Rate Reverse Mortgage, and loan availability on second homes is jumping to the forefront of conversations among Seniors.
For a free phone consultation, answers to your questions, and an informational packet on Reverse Mortgage programs, call Stu Naar, Certified Senior Advisor(CSA)®, and Branch Manager with US Financial Mortgage, in Boca Raton, at 561-995-2111 or 800-616-4008, or visit http://www.stunaar.com to use our Reverse Mortgage Calculator. Watch for our upcoming schedule of weekly FREE Lunch Seminars in South Florida.
Article Source: http://EzineArticles.com/?expert=Stu_Naar
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