Life Gets Even Better After Age 62
As you reach your senior years, many government programs suddenly become available, such as Medicare or Social Security, but there are other resources too.
What is a Reverse Mortgage?
A reverse mortgage is a cash payout to the homeowner based on the property’s equity. If you have $50,000 in equity, you may be able to take a monthly withdrawal from this amount as a form of income. There’s usually no monthly payments like a traditional mortgage. You simply receive a fixed amount every month until you move or the homeowner passes away. This mortgage type is only available to seniors because it’s meant to enhance your later years. Money sitting idle as equity is better used for your daily needs.
How to Qualify
You’ll be happy to note there’s no income requirements for a reverse mortgage. However, you must be at least 62 years old and own a primary residence. You cannot take out a reverse mortgage on a second or vacation home. The primary residence must have some equity to be eligible for the program. The purpose of reverse mortgages is using your equity to benefit the quality of life now. Retirees can potentially live into their 80s and 90s with today’s medical innovations.
Does My House Need to be Paid Off?
You can have a mortgage balance on the property and may still qualify for a reverse mortgage. The lender can create an account that offers you a monthly income while actually paying down the balance at the same time. Your original mortgage payment still applies, or may even drop in price, with the reverse mortgage in effect. Any mortgage payments in the past 2 years must be current with no late issues reflecting on your account. With a stellar payment history, your lender can easily push the reverse mortgage through.
Can I Refinance in the Future?
Similar to a traditional mortgage, you may be able to refinance any mortgage type if desired. Interest rates may be lower as well as your principal. Talk to your lender about possible refinancing when your reverse mortgage is several years old. There may be more equity available at that point with reduced interest. In your later years, it’s comforting to know your property can benefit you with additional income. Your investment is flexible so the mortgage should reflect that. Simply keep up with all your debts for easy financing.
Contacting a mortgage lender is the best way to help you get on the road towards a brighter future. The government wants you to enjoy your senior years. Your key to success is asking questions about all these government programs to understand your possibilities. Your home is a valuable asset meant to work for you, especially when you have ample equity.
Jessica Lucas
