A reverse mortgage might sound appealing if you're a senior who needs to supplement your retirement income, make needed repairs to your homes, or pay for unexpected medical expenses. Before entering into a reverse mortgage, you need to know what exactly a reverse mortgage is and how it works.
What Is A Reverse Mortgages?
This type of mortgage loan is available to senior homeowners— aged 62 and above. It allows senior homeowners to convert equity in their house into cash while still retaining homeownership. Instead of making loan payments to your lender or bank every month, you will get payments in a lump sum, a line of credit—or even a fixed monthly payment from your lender. As the lender makes payments to you, your equity decreases but the amount you owe on the loan increases.
How Does A Reverse Mortgage Work?
A reverse mortgage is just like a regular mortgage. You will need to apply and get approval from your lender. Your lender will use many details about you and your home to determine your eligibility. You must be age 62 years and older to be considered for a reverse mortgage. Lenders also consider the youngest borrower's age for the maximum loan amount.
Lenders want to ensure you don't owe more than your home is worth; they set higher initial equity requirements than regular mortgage programs. So to be eligible for a reverse mortgage, you must have at least 50% equity in most cases. You must also use the home as your primary residence and owe zero federal debts. Because you make no payments every month, the amount you increase over time. By law, you must not owe more than your house value.
If you are getting a reverse mortgage, you need to keep in mind that the following could result in foreclosure.
- If you die
- Evidence that the home isn't being well maintained
- Evidence that you're not living in the house as a primary residence
- Property taxes or homeowners insurance has not been paid.
How You Can Use A Reverse Mortgage
Reverse mortgages allow you to use your home equity in different ways. With a reverse mortgage, you can:
- Remodel your home
- Pay the property taxes
- Pay for care and health needs
- Supplement your retirement income
- Pay for a child or grandchild's education
- Keep a line of credit for unforeseen expenses
- Use the money to maintain your lifestyle
- Pay for your health insurance until you're eligible for Medicare coverage
- Pay off your current loan and other bills to reduce your monthly expenses.
Contact Seattle's Mortgage Broker (SMB) For Reverse Mortgage In Seattle
Try to speak with a mortgage expert who knows the ins and outs of everything about mortgages before you decide on a reverse mortgage. Here at Seattle's Mortgage Broker (SMB), we'll examine your financial condition and help you determine if a reverse mortgage is right for you. Contact us today at 206-251-0818 to explore your options for tapping into your home's equity,
Seattle Reverse Mortgage
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