Who can benefit from a reverse mortgage?
Are you a pensioner that finds it really hard to make ends meet each month? If you own your home, you could be sitting on a tidy sum of money, and by taking out a reverse mortgage you could release that cash and give yourself a far higher monthly income. A reverse mortgage is a great way to boost your income without having to sell your home, but you do have to be of pension age in order to use this facility.
By the time you reach retirement age, you may have paid off most or all of your mortgage, which means that you have considerable equity in your home. If you find that you do not have enough cash to live on each month, it makes sense to use that equity to improve your quality of life, and a reverse mortgage gives you the facility to do this.
With a reverse mortgage, you are able to borrow a sum of money based upon the equity in your property. This cash is normally paid to you on a monthly basis in the form of an additional income. At the end of the loan period, say five years, you can renew and continue receiving this income for another fixed period of time. Depending the loan amount and your equity, you can really boost your monthly income in this way.
The loan, of course, has to be repaid with interest. You can start repaying the loan upon expiry of the loan period (or whenever you cancel the loan). However, many loan companies provide seniors with a reverse mortgage income for the remainder of their lives, and then recoup the loan and interest from the estate when the borrower passes away. This means that the borrower does not have to worry about repayment of the loan, as it will be dealt with through the estate upon death.
11:52 AM in Reverse Mortgage
