It is one of the best things in life to see yourself progress through your career life; to look back and see achievements upon other achievements; to have the feeling of contentment and fulfillment. When such thoughts start finding their way to your mind, there is a good chance that retirement is beaconing. Maybe it has gotten to that point that you need to call time on your career. Some people dread retirement while others embrace it, but ultimately we must all be faced with it. Of course, the only thought that may now linger in your mind is your financial stability now that your job is coming to an end. You may be feeling a bit low financially or just looking for another source of income. A reverse mortgage is something you then need to consider.
As a retiree with limited income or few assets, reverse mortgage loans may be a solution to aid in such times. The concept of the loan is such that, for homeowners who are sixty-two years, or older, and who have reasonable home equity, can borrow against the value of their homes and get the accompanying funds. The Loan can then be granted to the borrower as a fixed monthly amount, a lump sum or a line of credit. In some scenarios, it is called to as a Home Equity Conversion Mortgage (HECM). With the onset of regulations on reverse mortgages and the need for instant cash flows by retirees, reverse mortgages are becoming more viable. This is why.
For starters, unlike the normal forward mortgages (the ones used to purchase homes), reverse mortgages do not need you to make any monthly loan payments, as long as you stay put in your house. However you, as the borrower, are called upon to make sure that the property taxes, homeowners insurance, and maintenance fees are all paid up. Secondly, you get to dictate how you will be paid. If you want quick cash for a project, you can choose to get the loaned fund as a lump sum. However, if you want monthly financial security-just like in your working days-then, you can get the fixed monthly amount. Alternatively, you can pick up a line of credit. Also, unlike a home equity loan, you won't need to have an income or a good credit score to qualify for reverse mortgages. This makes it open to more people of different financial states. Finally, federal insurance protects you in the case of the housing market decline. In the event that the loan amounts to a sum greater than the value of the home when sold, the government will cover the deficit.