Reverse Annuity Mortgage – The Senior Mortgage
Recently, there has been a surge in interest in getting a reverse annuity mortgage. With this mortgage type, homeowners can gradually take out the equity they’ve built on their home. A reverse annuity mortgage places them in a position where seniors don’t need to sell their home or take out a traditional home equity loan just so they could collect the equity.
However, not all homeowners are qualified to take out this type of mortgage. This type of mortgage has several requirements that a homeowner should meet. In order to qualify, a person must be at least 62 years old. The home should also be paid off already and valued more than the reverse mortgage amount. The property is not supposed to have any other mortgages or liens.
When a homeowner borrows against the equity in their home using a reverse annuity loan, they have the option of receiving a payment each month or being paid in one, large, lump sum. Since the mortgage is an annuity, homeowners receive payments on a recurring basis.
This type of mortgage is called a reverse mortgage because the normal order of things is reversed. Typically, a homeowner will pay the mortgage down over the life of the loan, until eventually they have a zero balance. The longer they live in the home and pay the mortgage, the less money they owe. With a reverse mortgage, the opposite happens. A homeowner receives money instead of paying it for however long they have arranged so. In essence, the monthly payment is how a homeowner is taking out their home equity.
As individuals get older and are unable to work, it can become increasingly difficult to meet their monthly obligations. This is particularly true if there are medical conditions that require people to be under the care of a doctor, be on medication, and even undergo expensive procedures. The payments coming from a reverse mortgage loan can actually make a big difference.
A reverse mortgage loan is also ideal for homeowners who have no plans of moving out or selling their home. Rather than let that equity sit there, a person in the latter stages of life, may decide that it is better to spend it then to let it sit there or leave it for someone else. A reverse annuity mortgage is actually good for those who have no surviving family members.
What are the reverse mortgage pros and cons? Let’s take a look.
Pros:
* Homeowners can benefit from their home equity.
* Home owners can continue living in their home. They can collect the equity without having to put their home on the market.
* Provides supplemental and sometimes much needed income for those on a limited budget.
* It has no effect on Medicare or social security benefits.
Cons:
* There’s a minimum age requirement of 62 years old.
* Homeowners will develop a loan balance as they borrow against the equity in their home which will eventually have to be repaid.
* There are fees involved: closing costs, origination fees, and service charges or insurance premiums.
* If homeowners fail to pay property taxes, don’t maintain their home, neglect their insurance payments, or fail to repay the money they borrow through the annuity, the home can be defaulted.
A reverse mortgage has its pros and cons. A reverse annuity mortgage can be the best option for the right person and under the right circumstances.
Loan Modification Hardship Letter Guide – Stop Foreclosure
|
|
The D-I-Y Loan Modification Special Report $19.99 Do-It-Yourself Safe, Effective Loan Modification – All In One Book! * Don’t pay thousands to a loan modification company * Learn the top ten insider secrets * Includes a comprehensive multimedia training program * We will walk you through the loan modification process step by step * Sample hardship letter included * Explore your options to make sure loan modification is right for you * Complete l… |
|
|
Loan Modification For Dummies ® $16.99 No Synopsis Available |
Tags: No Comments
0 responses so far ↓
Like gas stations in rural Texas after 10 pm, comments are closed.