Saving for retirement isn’t easy and a lot of us aren’t doing enough. Americans are getting better at it, as a recent survey shows that about half of Americans can now cover 80 percent of their essential expenses. That’s a major increase in preparedness from 2006, according to Fidelity.com. But that means that about 50 percent of the country still isn’t ready for their retirement years.
On top of that, people are living longer, so outliving your retirement savings is a very real consideration. If you’re concerned about funding your retirement years, one thing you may be considering is a reverse mortgage. At Cliffco Mortgage Bankers, we can help you to get a reverse mortgage and let you know how they work.
Cliffco Mortgage Bankers Can Help You Use Your Home’s Equity
Cliffco is dedicated to helping people find home loans. Very often it’s to find mortgages for home buyers, but we can help you to use your home’s equity. That’s the idea behind reverse mortgages. These loans help our clients be more comfortable in their retirement and we want to share with you what Cliffco knows about reverse mortgage and retirement.
How Reverse Mortgages Work
Reverse Mortgages, also called Home Equity Conversion Mortgages (HECM) allows you to access part of your home’s equity, according to the Department of Housing and Urban Development (HUD). Unlike traditional Mortgage loans, you won’t have to make a monthly mortgage payment. You can use your equity without paying taxes on them.
The Federal Housing Administration, (FHA) insures reverse mortgages, but there are requirements:
- You must be 62 or older.
- Own your home outright or be able to pay it off with the proceeds from your reverse mortgage.
- You must have the resources to be able to pay taxes and insurance.
- You must live in the home.
You can’t outlive a reverse mortgage. The loan does not become due as long as at least one homeowner maintains the home as their primary residence. Once the homeowner dies or ceased to use the home as their primary residence for more than 12 months, the loan comes due. The homeowner’s estate can elect to pay off the loan or sell the home. If the proceeds from the sale aren’t enough to cover the loan. the lender has to take the loss and ask the FHA for reimbursement. The lender can’t try to take any of your other assets.
If you’ve lived in your home for a long time, there’s a good chance you’ve built up a lot of equity in it. Reverse mortgages can make that equity work for you and cover those extra expensed you have in your retirement years.
Cliffco Can Help You Ease Your Retirement Years
If you think a reverse mortgage is right for you, talk to Cliffco. We can tell you if taking on a reverse mortgage makes sense for your retirement. We can also help you through the process of getting your reverse mortgage. Cliff is the place to go for whatever type of home loan you may be looking for. To get started, contact us today.