As you near your golden years, the last thing that you want to have to do is worry about money and how you are going to preserve your way of life. Many times, retirees find out that they may not have enough money set aside to assure the same lifestyle they had before leaving the workforce. But you may be overlooking the equity that you've accrued in your home. It can be accessed using an HECM reverse mortgage. And there are many upsides.
No Income/Credit Requirements
A reverse mortgage is not based upon your income nor your credit rating. It's based on the qualifying age of 62 or older and the available equity in your home. If you have a solid amount of available equity, and can demonstrate that you are able to maintain your home and pay property taxes and insurance, you qualify.
Eliminate Current Monthly Payments
One of the biggest benefits of an HECM reverse mortgage is that you are refinancing your home. This means that your current mortgage payment is eradicated. What's more, no payments are made on the loan until after you have died.
Lump Sum Payment Option
Among the payment options, many retirees prefer the lump sum option. This means that your available funds are deposited in your account in their entirety in a lump sum. It's ideal if you are hit with unforeseeable medical bills or have a large bill that surfaces that you'd struggle to pay off otherwise.
Line Of Credit As You Need It
A great option to consider is the line of credit option. This is feasible because you have access to all of your funds as you need them, but are only paying interest on the amounts that you are using. The funds are yours to use as you see fit, and can be accessed conveniently at any time.
Monthly Payout Options
Perhaps the most common option is the monthly payout option. With this method, the lender issues you a check on the same date of each month. Now instead of having a monthly mortgage payment, you will be receiving a check from the bank each month.
Make sure you talk to your financial advisor if you are considering a reverse mortgage. Taking out a home loan is a big decision that shouldn't be rushed. Knowing the benefits in advance can help you better decide what's right for you.