The Benefits of Reverse Mortgages: An Alternative Way for Albuquerque Homeowners to Tap into Equity

Reverse mortgage products are one way for senior-age homeowners to tap into their home’s equity while, at the same time, enhancing their retirement strategy for a higher level of monthly funds. This blog post will define what it is, the benefits, common requirements, things to consider and how to find a reputable lender.

What is a Reverse Mortgage?

The National Reverse Mortgage Lenders Association defines a reverse mortgage as a loan that allows homeowners over the age of 62 to “convert part of the equity in their home into cash.” The borrower is not required to pay the loan back until the home is either sold or is vacated for some other reason.

Benefits of a Reverse Mortgage

There are a number of advantages to getting a reverse mortgage as a homeowner in Albuquerque:

•  Reverse mortgages help those of retirement age by essentially giving them a credit line to use when they need it. 
•   The programs offer either lump sum payments or monthly income payments, which allow older homeowners to choose a method that fits with their retirement needs.

Common Requirements for Reverse Mortgage Qualification

There are some common requirements found when it comes to reverse mortgage qualification for those in Albuquerque and around the country:

• You must pay off any existing mortgage balance on your house first as well as pay interest on what you borrow, which is all deducted upfront from what you will receive;
•   You still must pay and stay current on taxes and insurance;
• Government  third-party counseling is required by law;
• You must be 62 years or older to qualify; and
• The reverse mortgage can only be done on your primary residence.

Determining if a Reverse Mortgage is for You

There are some things to think about when it comes to a reverse mortgage, according to a recent Fox News article:

• As soon as you die or move or if you are sick or move away from or if you are sick or move away from our home for more than a year, the loan is due.
• This type of situation does not leave money for your heirs in most circumstances.
• The money provided from these mortgages should be carefully managed so that it does not disappear in a year or two.

As such, you need to think why you need the money and if you might be better off with an alternative strategy. This does work as an effective line of credit so you don’t have to cash out stock or a CD and lose money in penalties. It is for those who have cash flow but just might need to top it up to cover other things like long term care insurance, for example.

What to Look for in a Reverse Mortgage Lender

There are a number of things to look for in a reverse mortgage lender. They should offer:

• FGA government-backed programs do not require any payments, credit reports, or income and asset verification;
• A saver program for additional ways to enhance your retirement strategies; and
• A team of experts who can offer a solution that matches your individual needs. 

Contact Indigo

Contact us today to learn more and determine if a reverse mortgage makes sense for your retirement strategy. We want to make sure you have all the information you need to make an informed decision.

Posted by Indigo Mortgage at 9:10 AM No comments: