Seniors Can Add Household Income with Reverse Mortgage Loans
by diywealth on Nov.24, 2009, under diy
For older adults who have to increase their source of income, reverse mortgage loans just could be the solution to their prayers. Qualifications are rather simple; must be 62 years old of older, possess a home that is a) fully paid for or b) with a tiny balance remaining, the property is the first residence and no debt delinquency exists on the property.
Pensioners who have spent their lives working and paying their mortgage find themselves at an age where they can finally realize their life’s dreams. Travel, buying a winter home in warmer locations or perhaps simply making improvements to their existing home ; now with the retirement, the couple suddenly has the time to do all the things they have wanted to do. Or could, that is, if only they’d the cash to do them. House rich, but cash poor is a situation that barely appears fair, after years. They could sell the house, but then not have a home to live in. And what about all of the memories that are enclosed in those walls?
Reverse mortgage loans can be the only answer to this dilemma. This kind of loan enables individuals to liquidate part of the equity which has built up in their home and convert it into serviceable money without selling their home. Better yet, they can do so without taking on any additional regular payments that traditional 2nd mortgages create. No standard payments will ever be needed to repay these loans so long as the owner continues to use the property as their primary residence. Oh, yes ; they retain ownership of the house, and keep living there just as they have for years . They can remain on their own property for the remainder of the lives, but now have the cash that will allow them to travel, make purchases or just enjoy the supplemental earnings to live nicely for the remainder of their days.
There are a few issues about the loans, however. Before committing to the loan, the individual must attend counseling sessions to ensure they’re completely aware of the implications of the loan. Closing costs still apply, and are usually higher than those related to a standard mortgage. Property taxes, homeowners’ insurance and mortgage insurance are still the responsibility of the homeowner. Also, should it become necessary for the owner to enter a care home for an extended time period, the house might become the property of the loan holder.
In several cases reverse mortgage loans prove to be highly beneficial for the homeowner, and can release the investment they have built up for years to permit them to enjoy their golden years.
