As a home mortgage company, your best interests are our best interests. With this in mind, we want to be available to help our clients make mortgage choices that are right for them. This can include seniors who are thinking about a reverse mortgage as a solution to help make ends meet each month. Here are some things to consider when looking at a reverse mortgage.
Do You Qualify?
A Home Equity Conversion Mortgage for seniors is the only type of reverse mortgage The U.S. Department of Housing and Urban Development insures. Make sure you’re working with a HUD approved home mortgage company if you want this type of reverse mortgage.
In order to qualify for any reverse mortgage, you must meet certain requirements. First, you must be a homeowner who is at least 62 years of age. You must own your own home or have a balance low enough that the proceeds from the reverse mortgage will pay off the remaining balance. You must continue to live in the home and be responsible for paying all annual taxes and insurance on your home. You must also show that you have the means to do so.
Single Disbursement vs. Monthly Installments
While there is temptation to take a lump sum payment, the recommended course of action is to provide yourself with a sustainable source of monthly income by opting for installments. This provides a more secure future for your retirement and helps to ensure that you can make ends meet along the way. If, however, you are confident of your financial situation and have specific purchases you wish to make right away, you may prefer the single disbursement option.
Do You Understand the Risks?
While you’re not required to repay the mortgage on a reverse mortgage, certain situations could result in you defaulting on your loan and losing your home. This includes thing like failing to pay taxes, failing to keep the property insured, or allowing the home to fall into a state of disrepair.
At Starboard Financial, our goal is to be much more than a standard home mortgage company. We want to be here for you to help you make informed decisions about all your mortgage needs whether it’s your first home loan or a reverse mortgage. Contact us here to learn more about how we can help you.