Feeling secure in your retirement isn’t always easy. For a lot of people, saving money for retirement has been difficult and they have insufficient money. If you’ve had trouble saving or if you were hit with a financial downturn as you approached retirement age, there is a way to secure your retirement years using the equity in your home.
Cliffco Mortgage Bankers Can Help You Find a Reverse Mortgage
It’s called a reverse mortgage and it’s designed to assist homeowners at or approaching retirement age. Reverse Mortgages, also called Home Equity Conversion Mortgages (HECM), allow you to tap into that equity tax free. At Cliffco Mortgage Bankers, we know you’re concerned about your retirement. We often help our customers find reverse mortgages and we want to tell you about the ways these loans can assist you in your retirement years and also tell you about other issues related to reverse mortgages and retirement.
Reverse Mortgage Basics
There are several prerequisites to being eligible for a reverse mortgage. The Federal Housing Administration (FHA) which oversees reverse mortgages requires:
- All homeowners on the title must be 62 or older.
- Borrowers must own and live on the property, using it as their primary residence.
- Homeowners must pay taxes and keep their insurance current.
- The homeowners are required to get consumer counseling and education before the loan is approved.
There are no income or credit qualifications for a reverse mortgage loan, but you will have to have a current appraisal of your property. The reverse mortgage loan does not become due until all of the homeowners die or cease to use the home as a primary residence. At that time, the homeowner’s estate can pay off the loan or sell the home. If the equity of the home is more than the balance due, the estate keeps the remaining equity.
How Reverse Mortgage Benefits Your Retirement
Using the proceeds from a reverse mortgage to help fund your retirement years can have several benefits, according to Forbes. One benefit is that the loan can serve as a bridge to delaying Social Security benefits. The benefits increase if you wait until age 70 to claim them. You can claim benefits as early as age 62, but at a lower rate. Using funds from a reverse mortgage can bridge that gap until age 70.
Reverse mortgages can also protect retirees from the volatility of the stock market. If the market dives during the early years of retirement, using funds from a reverse mortgage can help offset that risk. Reverse mortgages can provide an income for homeowners if they live for a long time, because they will be guaranteed a monthly payment over the length of the loan.
Let Cliffco Mortgage Bankers Explain Your Reverse Mortgage Options
There are, of course, drawbacks to reverse mortgage options. There are upfront fees associated with reverse mortgage and unfortunately, according to CNN, unscrupulous lenders use the fees to pitch other products like annuities.
You want a lender you can trust. At Cliffco Mortgage Bankers we’ll take you through all of your options and help you determine if a reverse mortgage is right for you. We want you to understand the terms of your loan and we’re always here to answer questions. To learn your options, Contact Cliffco today.