Factors To Consider Before Applying For A Reverse Mortgage

Reverse mortgage is increasing in popularity for many people especially those who are in desperate need of another source of cash to supplement their existing income. There are a lot of success stories about this kind of mortgage, but don’t apply for one just yet.

Although reverse mortgage loans can provide you the cash you need, they are not suitable for everyone and it’s not for all situations. Additionally, the procedures involved when getting this kind of loan could be quite confusing and you could wind up with massive debts instead of financial stability.

So what are the important factors you need to consider before you decide to apply for a reverse mortgage loan? Here are some of the things you need to know.

Reverse Mortgage Loan Requirements

One of the most fundamental things you have to know about this type of loan is that you should be at least 62 years old. You should also reside in the home where your home equity will be put up against. You are also required to pay off any existing mortgage on your home, in case there’s any. The amount that you could get out of a reverse mortgage loan is based on different factors. These include the value of your home, the mortgage limit that’s been set by the government for your location or the lender’s imposed limit, both current and future rates, your age, as well as the fees that are going to be deducted once the loan is released.

The lender would also ask you to stay in your house. If you do so, the lender won’t be able to ask for repayment unless you decide to move out of the house or sell your home.

Therefore a disadvantage to this type of loan is that you can’t just move out whenever you want to and go to different places during your retirement years.

How Can You Get Your Money?

The majority of reverse mortgage institutions will offer you three options on how you can get the proceeds of your loan. You could obtain the cash as a line of credit, a lump sum, or in monthly payments. However, many lenders would let you to combine these three methods of payout.

The Cost of Obtaining A Reverse Mortgage Loan

One of the most crucial things to think about is the cost of getting a reverse mortgage loan. It is because this kind of loan could be extremely expensive. Form insurance premium to origination fees that tend to cost as much as $25,000 or even higher and that is just for a reverse mortgage loan of $250,000. Additionally, you also have to think about the interest rates.

Impact On The Eligibility For Government Assistance

In case you are already enjoying help from the government, you have to first look for more information if getting a reverse mortgage loan could affect this. A few of the government assistance that could be impacted are Supplemental Social Security Income, Medicaid, as well as food stamps.

These are only a few of the most important factors that you have to consider before you apply for a reverse mortgage in Columbia. And when you are only looking to get a loan for your luxuries or any unnecessary investments, you must take this into account several times over. Reverse mortgage loans can be quite expensive to pay off if you only plan to spend them on things that you don’t need.

Call Reverse Mortgage Specialist if you want to know more about reverse mortgage loans. 

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/