The Advantages and Benefits of a Reverse Mortgage greatly outnumber the downsides. While some news outlets focus on the negatives of a reverse mortgage, this will point out why the reverse mortgage program may be the financial tool you may be looking for.Reverse Mortgage Payout Options
The reverse mortgage program has many different payout options available, such as a lump sum, line of credit or a guaranteed monthly payout as long as you stay in the home. Another feature to the payouts is you can do a combination of the above options. And depending on the payout type you choose initially, you can change the payout option at any point during the loan. To see more about payout options, click here.
No Credit Score or Income Required
Currently, the reverse mortgage program does not require a certain credit score or income to qualify for the loan. Although that may change in the near future, depending what HUD says. HUD oversees the reverse mortgage program or what they refer to as the HECM program, which stands for Home Equity Conversion Mortgage. If you currently have low income or credit problems, this may be the solution for you. Because you can still pay on a reverse mortgage just like a traditional mortgage without any penalties.
No Monthly Mortgage Payments
The biggest advantage and benefit of a reverse mortgage is that there are no monthly mortgage payments required as long as you live in the property. Of course, you are still required to pay the property taxes, homeowners insurance, HOA fees and maintain the home.
The Lender Does Not Own the Home
Most people tend to think that once you take out a reverse mortgage, you hand the title over to the lender or bank, that is not true. You still retain title to the home, just like as if you take out a traditional mortgage.
Does Not Affect Government Benefits
If you are currently collecting social security or Medicare benefits, taking out a reverse mortgage does not affect these. The reason is a reverse mortgage is not treated as income because you are using the equity in your home. However, if you are on Medicaid, that be affected if you do not use the funds immediately. You will want to speak with a financial advisor if this is the case.
A reverse mortgage is almost like a traditional mortgage except you do not owe anything to the lender until you move out of your home permanently.
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The Advantages and Benefits of a Reverse Mortgage
![The Advantages and Benefits of a Reverse Mortgage]()
Reviewed by Merlyn Rosell
Published :
Rating : 4.5
Published :
Rating : 4.5