There are many mortgage products on the market that work for all different kinds of homebuyers, but many people have not heard about reverse mortgages and how they can benefit their situation. If you are curious about this type of mortgage and want to know more, here are some questions that will get you on the road to understanding the ins-and-outs of this product.
What’s A Reverse Mortgage?
In short, a reverse mortgage is a type of home loan secured by a primary residence, where repayment is deferred to a later date – generally when the home sells. This loan allows you to convert some of the equity in your home without having to sell your home.
Who Can Qualify?
Adults 62 years or older who occupy their home as their primary residence, meet the requirements of a financial assessment including income and credit to ensure that you can pay property taxes, homeowners’ insurance, and other applicable property charges. The reverse mortgage is not for everyone!
What’s Required to apply?
It is very important that you receive education on what this loan is and is not! Aside from education from a certified reverse mortgage professional (CRMP) it is necessary that you receive housing counseling known as HUD counseling. This session is required prior to signing a loan application which in the state of California is 7 days after the counseling date. The file must be documented with income, credit, and an extensive list of other important items. These documents are not unlike traditional loan requirements.
Should I Choose A Reverse Mortgage?
A review of your financial plan, short and long-term goals, and intentions for living in your home ideally long term, will help you determine if this is the best option. The right time to choose a reverse mortgage is when it is best for you. Post phoning a decision in anticipation of a better rate or higher home value is risking best practices available in the present moment. Knowing the decision is based on accurate facts allows you to decide if this type of loan is in your best interest. Eliminate monthly mortgage payments? Create a line of credit for future use? These are only a couple of reasons to consider when evaluating this loan.
To learn more about reverse mortgages, contact your local certified Reverse Mortgage Professional (CRMP) for guidance and expertise.
