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What Seniors Should Know About Reverse Mortgages |
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Written by John Campbell
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What Seniors Should Know About Reverse Mortgages What Seniors Should Know About Reverse Mortgages
By John Campbell A reverse mortgage can make good financial sense if you're an older person with a lot of equity in your home but strapped for cash.
If you're 62 years of age or older and no longer have a preexisting mortgage or owe very little on your existing mortgage you can transform your home equity into cash. This can be done with no increase in your taxes and shouldn't affect your Social Security or other benefits. You don't even have to give up the title to your home.
As with any mortgage, you may be responsible for paying a number of fees and closing costs to obtain the loan. Unlike a traditional mortgage or home equity loan, however, the principal and accumulated interest is not due until you sell your home or move out under most circumstances. Your loan may become due immediately if you fail to keep up with your normal homeowner's expenses including property taxes and homeowner's insurance. If you die before the loan is paid off, the loan will be paid directly from your estate. Any remaining equity in your home will go to your heirs. Any other assets in your estate will remain untouched. With a reverse mortgage you don't have to worry about passing your debt on to your estate or heirs. |
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