The home does not fit your long-term needs.Although equity may remain after paying off a reverse mortgage, if you want to leave your home to your loved ones “free and clear,” then it may make sense to avoid a reverse mortgage. They will have the option to pay off the reverse mortgage and whatever equity remains after payoff and fees associated with the sell, will belong to the estate. If you take out a reverse mortgage, your heirs will receive your home with a loan on it. A reverse mortgage is a negative-amortizing loan, which means that your balance will grow over time, reducing the overall value of your estate. You wish to protect or legacy and leave as much as possible to your heirs. ![]() If you plan on vacating within the next couple years, it may be worth exploring other loan options, such as a HELOC or another loan with low upfront closing costs. A reverse mortgage comes with upfront costs, so using it as a short-term tool, may not be in your best interest. You plan on moving in the near future.Here are a some possible disadvantages to obtaining a reverse mortgage: We feels that it’s our responsibility to educate potential borrowers about all aspects of a reverse mortgage, positive and negative. You will hear reverse mortgage professionals discussing the benefits about reverse mortgages. When a reverse mortgage may not be a good option * The borrower is responsible to pay property taxes, homeowners insurance and any other charge associated with the property. With an adjustable loan, you can choose to take your proceeds as a lump sum, monthly payment, line of credit or a combination of all. Help family in need of some financial assistance.Imagine gifting a child or grandchild the down payment for their first home. Make needed home improvements and repairs.Pay for medical care and long-term care needs.Pay off an existing mortgage or other debts (car loans, credit cards, etc).With a reverse mortgage, you can eliminate debt and use the funds to pay for life’s everyday expenses Use a reverse mortgage to: ![]() One of the biggest benefits of a reverse mortgage is that monthly mortgage payments are not required.* ![]() It allows you to access a portion of the equity in your home in cash, monthly payments, or a line growing line of credit, to be used any way you see fit. You will learn when a reverse mortgage could be a good option for you and also when you should most likely avoid a reverse mortgage.Ī reverse mortgage is a loan, secured by a home, where repayment is deferred to a later date, typically when the home sells. This guide will offer a straightforward approach on reverse mortgages. Spend the time it takes to determine if a reverse mortgage is the best solution to whatever your needs may be. Don’t you owe it to yourself to do your own research and draw your own conclusion as to whether or not a reverse mortgage is a solution to a need you may have? Your home is likely your largest asset. Sadly, many of you reading this, who may be perfect candidates for a reverse mortgage, will choose not to get one because a misinformed advisor (financial planner, friend, family, CPA, attorney, etc) presented incorrect information to you. Maybe you have a negative view of a reverse mortgage because someone told you they were bad and you took that persons advice at face value. Maybe someone you know, such as a friend or relative has a reverse mortgage. You have most likely seen the TV ads with celebrity spokespeople, such as Tom Selleck, Fred Thompson, Robert Wagner and Harry Winkler, promoting the benefits of a reverse mortgage.
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