“Your present circumstances don’t determine where you can go; they merely determine where you start.”- Nido Qubein
THE MOTLEY FOOL
3 Reasons to Get a Reverse Mortgage
In a recent article, The Motley Fool contributor Maurie Backman talks about reverse mortgages and highlights 3 reasons for considering this strategic financial tool.
As she notes in the article, seniors today face a number of financial challenges when it comes to retirement.
However, there is one important asset that older Americans can tap into to help – their home equity.
Reverse mortgages enable you to stay in your home and leverage the equity you’ve built up. And unlike traditional loans where you make monthly payments, with a reverse mortgage you only repay the principal and interest once you sell or move permanently from the home.
3 Reasons Why it Could Pay to Get a Reverse Mortgage
from Maurie Backman
1. YOU NEED MONEY BUT DON’T HAVE GOOD CREDIT
If you need money and don’t have the best credit score, a reverse mortgage can be an ideal solution, since it doesn’t take that number into consideration. Instead, eligibility is based on having equity in your home, and if that equity is there, you’re likely to get approved.
2. YOU WANT FLEXIBILITY WITH YOUR MONEY
You can use a reverse mortgage to pay for basics like heat, food, electricity, and a host of other expenses that have nothing to do with your home. You can even use that money to travel, if that’s something you’d like to do!
3. YOU WANT A LOAN WITH FLEXIBLE REPAYMENT TERMS
Unlike a home equity loan, with a reverse mortgage you don’t need to repay until you move out of your home, sell your home, or pass away. Then your heirs can sell your home to satisfy that obligation.
Requirements for a Reverse Mortgage
- Be at least 62 years old
- Have sufficient equity in your home
- Live in the home as your primary residence
- Have a home that meets HUD standards
- Not be delinquent on federal debt
- Participate in a HUD-approved counseling session
- Be able to keep up with taxes, insurance, HOA payments and home maintenance