In an instance where a homeowner relinquishes equity for their home in exchange for regular payment, a case of reverse mortgage reflects. It is of essence to note that reverse mortgage applies to home occupants who are already aging. In this regard, the move to relinquish their home equity is motivated by the need to supplement their retirement income. However, it should be noted that children to the aging parents can push for reverse mortgage with the aim of enjoying the ultimate benefits upon the demise of the original homeowners.
Advice on HECM Rates
Reverse mortgage ushers in a number of benefits including:
1. Elimination of Mortgage Payment
Considering that reverse mortgage is all about withdrawal of home equity, it is clear that you will not be required to pay regular mortgage installments. In fact, you will not have to pay anything for your mortgage. Apparently, 50% of all borrowers end up using their loan proceeds in repaying their mortgages. This is an indicator that the said percentage may not have time to secure their future and that of their children. In an instance of reverse mortgage, mortgage payments are brought down hence allowing you to secure your retirement. Note that even the HECM rates will not be paid upon request for reverse mortgage.
2. Gives Access To Cash
There is no doubt that access to cash is highly important for retirees. Unfortunately, most people heading for retire have never been able to save enough for their future. The Economic Policy Institute confirms that majority of individuals heading for retirement are only able to save averagely $5,000. Others do not have savings at all. Evidently, this is not enough to secure the future of a person aged 62 years. The good thing about reverse mortgage is that it provides access to cash. If you are looking for immediate cash flow, then a reverse mortgage will certainly work in your favor.
3. Gives An Extension of Retirement Benefits
What most people do not know is that majority of retirees rely on social security funds. In fact, most of them start taking their social security benefits as early as at the age of 62 years and do it frequently thereafter. It is worth noting that the more frequently you take your social security funds, the lesser the benefit you enjoy. Delay in taking social security funds gives you the chance to claim an even higher amount as retirement benefit. Reverse mortgage gives you the chance to extend your retirement benefits since you will have an extra source of funds. You can therefore skip your social security funds severally, hence increasing your ultimate benefits.
4. Security For Your Children
It is rather obvious that in retirement, income levels are mitigated. This is for the obvious reasons that the retiree will no longer make any income from his/her previous place of work. In an instance where your children as not in a stable condition or are at their early ages, it might prove to be a serious challenge to sustain their welfare once you retire. However, this can be made easy through reverse mortgage. If you have social security benefits and an addition of reverse mortgage benefits, then it would be an easy task to ensure then best for your children.
5.Gives Room For Home Remodeling
The fact that you have withdrawn your equity after requesting for reverse mortgage does not necessarily mean that you will be the one to fund the process of home remodeling. You will still enjoy the privilege of having your home remodeled under your previous mortgage subscription. Remodeling in this case include face uplift, installation of modern facilities, among other things. This means that you will have the chance to use the funds sourced from reverse mortgage on other activities other than funding the remodeling process.
Key Requirements For Reverse Mortgage
So, what do you need to qualify for a reverse mortgage?
- At least 62 years of age- In most places across the world, normal retirement age ranges between 55 and 62 years.
- The home must be your primary residence- This should be the home occupied by yourself and if possible your family.
- You should keep paying property tax as well as the respective homeowners insurance.
- Your home should be; 2-4 unit house, approved condominium, single family home, or manufactured homes.
In summation, there is a lot that reverse mortgage has to offer to your advantage. It would be ideal to contact Rick May Reverse Mortgage when applying for a reverse mortgage when approaching your retirement age. Alternatively, you can request for reverse mortgage if your parents are already aging and if you feel that the benefits that come with the request will be good for you. Contact us for more information.