Reverse mortgages can help homeowners who are 62 years old or older receive a single payment or monthly payments based on their homes' built-up equity. Many people have probably heard of this kind of mortgage but they may not know what the benefits are.
A reverse mortgage has advantages that can make it appealing. You can learn about key reverse mortgage facts by doing some research on your own and speaking with a qualified mortgage loan originator who can address any unanswered questions that you may have.
Here are just a few points to keep in mind:
- 1. You receive payments. As mentioned before, a reverse mortgage gives homeowners the opportunity to use the equity in their property to obtain either a lump sum or monthly payments. This money can be used to pay off any debt, medical bills, or open a line of credit.
- 2. You don’t have to be home-mortgage free. Just because you haven’t completely paid off your current mortgage doesn’t mean you can’t obtain a reverse mortgage. To find out if you qualify, you would need to provide your tax returns, paystubs, Social Security benefit verification letters, and other financial information. It's best to contact a mortgage loan originator to find out more.
- 3. You’re still the homeowner. Many people rightly take pride in owning their own homes. But they might hesitate to get a reverse mortgage because they're under the false impression that they wouldn’t own their property any longer. This is simply not true.
- 4. You won’t have to pay more in taxes. One of the most beneficial advantages of having a reverse mortgage has to do with your tax bill. A reverse mortgage is considered a loan, which means it is not taxable. Of course, you have to continue paying your property taxes, your homeowners insurance and your maintenance and upkeep (since you’re still the homeowner). You should speak with your financial advisor to learn more about how a reverse mortgage can benefit you.