No More Mortgage Payments-Here’s How!

Are you house rich and cash poor? In recent years property values have soared, while investment returns have been modest. This has created a situation where a lot of seniors are finding themselves using their retirement savings to pay their mortgage payments. These cash strapped seniors are looking for ways to increase their retirement income while continuing to live in their homes. These retirees find that their options are limited, and in most cases require them to risk their home. Enter the FHA reverse mortgage, which can provide many advantages over the mortgage payments dilemma.

Seniors can sale their homes, will it to their kids or keep it as long as they want. The payments are deducted fro the equity in the home and when you decide to sell the home, it is just how much you sell it for less what you owe is  what you get. Just as it always has been. If you owe say $100,000 on your home and over the next 10 years the payments make it so you now owe $130,000 on it and you sell it for $200,000 you get the difference. But, during the 10 years you had the reverse mortgage, you didn’t make any house payments. So no matter if you have a California mortgage, a Nevada mortgage or anywhere else, consider a reverse mortgage.

Reverse Mortgages

You may not understand a reverse mortgage. The biggest advantage of a reverse mortgages is not having to make payments as long as you continue living in your home. In fact, this is the number one reason that seniors choose to borrow reverse mortgages. Almost 80% of reverse mortgage borrowers use a reverse mortgage to pay off their current loans in order to eliminate their house payments. Let’s say you owe $50,000 on your first mortgage and borrow $80,000 with a reverse mortgage. This would pay off and eliminate the payment on the first mortgage and provide you with $30,000 to use as you please.

Stay in Your Home For Life

The second advantage of reverse mortgages is the ability to live in your house as long as you like. The great thing about this is the amount you owe on the reverse mortgage can never be more than the house is worth. Let’s say you live to 115 and have selected to recieve a $300 a month payments for life from the reverse mortgage. The amount received from the reverse mortgage payments could be substantially higher than the value of your home, yet the amount owed will still only be the value of the home. In this situation, FHA insurance will cover the difference.

Reverse Mortgage Withdrawal Options

Another advantage of reverse mortgages is the different withdrawal options that a you are able to choose. These options include lump sum distributions, line of credit, monthly payments, or any combination of these three. So if you were eligible to borrow $100,000 on a reverse mortgage you could select to receive $30,000 up front to cover current expenses, and hold the rest as a line of credit that you can use whenever you need it. This flexibility of reverse mortgages can significantly improve you financial independence during retirement.

Tax-Free Advantages of Reverse Mortgages

Another advantage of reverse mortgage is the tax-free nature of the loan proceeds. The American Bar Association guide to reverse mortgages advises that generally the IRS does not consider loan advances to be income. This means that all the money from the proceeds of the reverse mortgage end up in your pocket.

With these features, reverse mortgage are definitely an option to consider if you are looking for ways to supplement your current income. As with any financial decision, you should seek the advice of a trained professional, a reverse mortgage counselor, to evaluate and determine if a reverse mortgage is right for your situation. We are happy to answer any questions about reverse mortgages with no payments. Give us a call 877-244-9190.