A reverse mortgage is availabe to seniors who are 62 years of age or older. No payments have to be made as long remains the primary residence. The owner can never owe more that the market value of the home.
There are three basic reasons seniors choose the advantages of a reverse mortgage.
- Create additional monthy income.
- Pay of an existing mortgage and not have monthly payments.
- Create a line of credit (cash reserve) for emergencies.
There are several myths that keep being repeated by well meaning friends and neighbors and sometimes by financial professionals.
Myth: The lender owns the home.
The fact is that just the same as with a mortgage to purchase a home, only a lein is filed by the lender to record the debt. The lender does not own the home.
Myth: The lender takes the home for repayment.
The lender wants repayment of the loan when the owner moves from the home. The home can be sold by the owner or the estate to settle the debt. Proceeds from a sale beyond repayment of the debt belong to the owner or estate.
Myth: The home has to be free and clear of debt to use a reverse mortgage.
The amount available from a reverse mortgage is calculated primarily by the age of the owner and the appraised value of the home. The older an owner is, the larger the amount of the reverse mortgage that is available.
Myth: Heirs will disapprove and create family friction.
Heirs will support parents potential to remain self sufficient. In many cases they do not have the financial capacity to help with providing additional living expenses above their own families.
Myth: Only poor people use reverse mortgages.
Financial planners increasingly educate their clients on reverse mortgages as a potential asset to use for income if needed for living expenses, emergencies, medical expenses and as a back up for future use if required. Other estate planning uses.
For a confidential review of the suitability and amount of equity available to you, please call Jay at 520-909-9375, NOVA Home Loans, Tucson, Arizona.
