Oftentimes we hear a lot of big stuff going on in real estate, specifically when it comes to the true American institution, the home mortgage. We’ve seen the mortgage trends. Rising home price predictions in the U.S.? Check. What about those new mortgage rules made into law? Double-check. Given all the news about the real estate market (and how foreigners are investing more and more in U.S. real estate as we speak), there’s no wonder that everyone’s buzzing about the ever-changing landscape and just trying to keep up with the times.
But a Reverse Mortgage? Now That’s a Mystery….
Most think it’s this sort of “Wheel of Fortune,” oh-you’ve-won-a-new-car sort of fantasy deal where you get to live in your home and get paid for it! Seriously? Well…. Yeah, it sort of is like that. Sort of.
But before you get yourself to the office and see if you can sign up for this reverse mortgage thing, bear in mind these important real estate facts:
- To Qualify for a Reverse Mortgage, You Generally Have to Be a Senior Citizen
- You Have to Own the Home (or At Least Close to Owning the Home)
- You Must Not Have Any Outstanding Loans on Your Credit Report
Aside from that, there’s also the 50% market value rate for those monthly payments you’ll receive, plus the interest rate, number of payments and the terms itself largely depend on just how old you are. Lots of things you have to keep in mind.
Generally speaking, though, let’s just assume you qualify for a reverse mortgage. The question is this: should you get one? Good question.
You Have to Be a Certain “Kind” of Senior Citizen for a Reverse Mortgage to Benefit You
What exactly does that mean? You’ll find out right here. The unbelievability of what a reverse mortgage is should tell you something: nothing’s for free. And a reverse mortgage, while technically a loan that’s designed to actually pay you cold, hard cash just for living in your own home, will only work for a certain situation.
Are you still working? Do you have a fixed income? Do you have medical bills? These are all valid questions — and may affect whether or not a reverse mortgage might be the way you want to go.
On the Other Hand…. There’s a Really Big Reason Why You Don’t Want a Reverse Mortgage
Your favorite word of the day should be the word equity. As in, that’s how a reverse mortgage works. You’re actually getting paid for the equity you put in during your entire time living in the home for the terms of your original mortgage loan. Sounds great and all…. Except for this one important fact you’ll have to read about.
Let’s just say you’ll make it that much harder for your family after you’ve passed away. Can you say ‘increased interest rates’?
The Point of This Is to Do the Research With Us and See — Maybe It’s Beneficial, Maybe It’s Not
Not everyone qualifies for it. Not everyone will experience the benefit in it. So before you jump on the prospect of a reverse mortgage, consult a professional — with the H.O.P.E. Program, perhaps — and see if it may be a way you want to go. You never know.