In today’s tough economy, Americans age 62 and older are realizing that a reverse mortgage can be an important part of their financial future. With limited or dwindling retirement savings, concerns about outliving their assets or just the desire to live more comfortably, increasingly savvy seniors are realizing the benefits reverse mortgages can offer.
A reverse mortgage is a loan that allows homeowners age 62 or older to tap into the equity that’s been built up in their home. The homeowner can then use the cash they receive in a variety of ways, such as paying for monthly living expenses, home improvements, health care, or whatever the desire. Of course, the homeowners must continue to pay property taxes, have homeowners insurance and maintain the home. The borrower continues to own and live in the home without making monthly payments, and the loan doesn’t become due until the last surviving borrower passes away, sells the house, or leaves it for more than 12 months. Although there are no monthly mortgage payments, interest accrues on the portion of the loan amount disbursed.
“Because of the way the reverse mortgage product is designed, it may be a good solution for many people, and may help them maintain financial independence while remaining in their homes,” notes Rick May, Reverse Mortgage Planner. “One of the best things about my profession is that I get to see first-hand how a reverse mortgage can make such a positive impact on people’s lives—and I’m very proud to be a part of that process. Helping mature adults enjoy a more comfortable retirement gives me the chance to give back to the homeowners that have worked so hard all their lives. Rather than paying for their home, now they can have their home pay them!”