There are various debates surrounding reverse mortgage. Some might tell you that it’s one of the best retirement plans, and others may say that there’s no bigger mistake you could make. But the thing is, reverse mortgage may be good or bad depending upon your requirements.
Reverse mortgage is simply a way of converting your home into cash. But obviously, there are various nitty-gritties attached to it, and you need to consider all of it before you opt for it. So how do you know if reverse mortgage is right for you?
You can start by asking yourself some basic questions.
Do you understand all the rules?
Make sure that you are not taking a reverse mortgage because someone coaxed you by making big promises. Check all the information out for yourself and U.S. Department of Housing and Urban Development is the best place to get all the info.
Are you eligible?
You must be at least 62 years old and either own your home completely, or have sufficient equity in it. Also it is required for you to receive information from an approved HECM counsellor.
Do you live in your home?
First of all, to avail the mortgage, it is required for that property to be your primary residence. Also it is an ideal condition if you want to live the rest of your life in same place.
It is not same as selling the place!
You will still own the place, and will be required to pay property taxes and insurance and will be responsible for maintaining the property.
Ideal if:
You are in late sixties or older, are worried about future expenses and have equity in your home.
Make sure you talk to other members living in the home about this. A reverse mortgage becomes payable if the last surviving borrower of the loan moves out, or dies. In that situation, lender sells the property to pay off the loan. If you want to keep your house, you will have to pay off the mortgage.
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