If you are a retired homeowner interested in gaining some supplemental income or purchasing a different property, you may want to consider a reverse mortgage. A reverse mortgage is a loan that is taken out of the equity that you already have in your home. There are many factors to consider when applying for a reverse mortgage, and sometimes the guidelines can be difficult to understand. If you are a retired homeowner in Jacksonville, Florida, and want to know more about your mortgage options, North Star Mortgage Network, Inc. can help. Read on to learn more about reverse mortgages for retirees.
How Does a Reverse Mortgage Work?
Reverse mortgages are loans that allow a homeowner 62 years or older to convert their home equity into cash or a line of credit. Rather than a borrower having to make monthly payments to a lender like a traditional loan, the lender makes payments to a borrower; essentially the lender is taking your loan out of the equity in your home and paying it back to you. The reverse mortgage is used to pay off the remainder of the mortgage if the home is not paid off, and the leftover funds can then be used for other purposes, such as purchasing a different home to suit your needs, paying off debt, making home renovations or repairs, etc. You will still be responsible for paying fees and interest for a reverse mortgage, but as long as the borrower remains living in the home, they will not be required to make any mortgage payments. With a reverse mortgage, you continue to be the owner of the home, and the loan will become due only when the borrower moves out or passes away.
What Are The Advantages of a Reverse Mortgage?
Although a reverse mortgage may not make sense to some homeowners, it can offer several advantages to others. One major benefit is that you are not required to make any monthly mortgage payments, they will instead be paid to you. Every borrower with a reverse mortgage has the option of receiving the money depending on their unique needs; you can receive the funds either as a partial sum or one lump sum, and you can receive the payments as cash, credit, or even a combination of both. Additionally, in a reverse mortgage you remain the owner of the property and the compensation that you receive is tax free. Borrowers are also protected from any housing market changes and any decreases in home value since reverse mortgages are non-recourse loans. You will want to ensure that you can afford to pay off a reverse mortgage because if you are unable to, you may have to sell your home.
If you are a retiree interested in learning more about reverse mortgages in Jacksonville, Florida, contact North Star Mortgage Network, Inc. today for a consultation.