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Accountant Newark; Is Reverse Mortgage for You?

Is a Reverse Mortgage Right for You?

Accountant Newark

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Accountant Newark | Retirement

The first reverse mortgage was introduced in the 1960s as a way for retired seniors with limited incomes to remain in their current homes. During the past 50 years this unique loan has helped countless seniors avoid financial disaster and instead live their retirement in luxury.

So What is a Reverse Mortgage?

During a traditional mortgage, the homeowner pays a monthly mortgage fee to the bank with the object of eventually owning the house. A reverse mortgage is the opposite; the bank pays the homeowner ready-to-use cash in the form of a loan, using the house as collateral in the event the retiree passes away, moves, or chooses to opt out of the loan. In essence, the loan borrower becomes the lender, using his house as equity to a private bank.

The Benefits of a Reverse Mortgage

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Reverse Mortgage | Accountant Newark

In a way, the cash the homeowner receives during a reverse mortgage replaces the income he or she received before retirement. You can use the steady stream of income from the loan at your discretion since it’s non-taxable, doesn’t affect your Social Security income, and won’t change Medicaid benefits.

Who Qualifies for a Reverse Mortgage?

  • You must be 62 years old or older
  • You must own your home*
  • Your house must possess enough equity
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Accountant Newark | Finances for Retirement

*You might still qualify for a reverse mortgage even if you currently have a mortgage on your house. If you still owe $85,000 on your home but the value for a reverse mortgage is $185,000, you can pay the rest of your mortgage and the bank will still have $100,000 to use as your loan payment.

What Do I Have to Do During a Reverse Mortgage?

Once you seal the deal on a reverse mortgage, you continue caring for your home as a typical owner, including:

  • Repairs and maintaining the value of the house as much as possible
  • Paying property taxes – you are still the primary owner
  • Remaining in residence at the home of the reverse mortgage (you can’t leave for longer than a year)
  • Keeping up with home insurance payments to guard against catastrophe

If you need to set up home insurance before you proceed investigating reverse mortgages, we’d be happy to help you out!

If you still have questions about reverse mortgages, call 315-331-7925 and let’s discuss if it’s a viable option for you.



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