Sooner or later we all have to retire from our jobs, and that means that your income is halted and what remains is the retirement fund and savings that you have in store. Occasionally you have heard about the importance of planning for retirement and the need to be financially secure when you are not necessarily productive compared to when you were younger. Surely, not many of us can heed the calls for proper retirement planning based on various reasons including inadequate income. Therefore when you retire, it is inevitable and inadvertent that you are faced with financial problems that could include unpaid loans and mortgages.
The foregoing assertions are what makes reverse mortgages to be a facility that is nothing short of amazing. A reverse mortgage, also known as home equity conversion mortgage (HECM), is a loan facility that allows a borrower to transfer some home equity to a lender in exchange for cash without giving up the title of the property or making monthly mortgage payments. Reverse Mortgage Guide indicate that this facility is available to senior citizens who are above the age of 62 years. You are thereby granted money for a portion of equity in your home, and you get to keep your it for the rest of your life.
The benefits of reverse mortgages are enormous, and the main ones are elucidated as follows;
You retain ownership of your home
There is a general misconception that reverse mortgages would require you to give up the title of your home. This could not be further from the truth because you not only get to hold possession of your home but also the title of the property remains in your name for as long as you live. However, you (the borrower) are expected to pay accruable taxes, insurance, and fees. Also, the lender expects you to comply with every term that is agreed in the contract.
No monthly mortgage payments required
Monthly mortgage payments could be stressful and strenuous especially when you do not have a consistent source of income. The beauty of reverse mortgage is that you are not mandated to pay the monthly installments for as long as you live. Loan repayment is also payable when you sell the home or move out to another primary home.
Protection against depreciation
Reverse mortgages are primarily insured by the government which means that your loan is granted greater security. Therefore if your loan accumulates to a total that exceeds the value of your home, then the government is in play to pay the difference. In this regard, you are well protected in case your house depreciates in the market.