About San Clemente Reverse Mortgage Lenders

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Published: 12th February 2013
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About Reverse Mortgages

The reason why retirees find reverse mortgage more beneficial and advantageous compared to a second home mortgage or a traditional home equity loan is that in essence, a reverse mortgage is a way by which they can cash out a loan based on the equity that they have accumulated over the years; as well as being protected from paying monthly mortgage payments and interests. This is an attractive option as if they qualify they will be able to get a hold of the value in lump sum, in monthly increments, a guaranteed tenure payment or as credit line which they can utilize as supplemental income, payment for health and medical needs, existing mortgage or even the purchase of a second home. Moreover, to enjoy the sum of money, they would not have to move out of the house or sell the house for that matter. The owner keeps possession of the house. They are still the owner of the house and have their name on the title. In order to qualify, the most basic requirement is for a borrower to be at least be 62 years old.

Details On Reverse Mortgages

As consultants from San Clemente Reverse Mortgage might tell you, another distinctive characteristic of a reverse mortgage is that payment of the amount loaned is not to be settled unless one of the following conditions concur:

The property is sold.
The house ceases to be the primary home.
The borrower(s) is/are deceased

As opposed to traditional home equity mortgages, qualification for a reverse mortgage is relatively easy and simple. While there are credit reports plus viable and sustainable income questions with regular mortgage, reverse mortgages stick to basic requirements that the applicant be 62 years old or above and be the rightful owner of a home property that is their primary residence. In the case of credit rating, a borrower with bad credit will still qualify provided he has no defaults for federal loans. Also the reverse mortgage is government insured and you can never owe more than the value of the home.

Individuals considering a reverse mortgage option must obtain HUD counseling through a third party without affiliation with a party of interest before going through the loan application process. Although reverse mortgages will not be subjected to personal income taxes, the borrower should nonetheless learn how government supported programs like Medi-Cal or Medicaid will be impacted. Social Security and Medicare are not impacted.

What Not To Use Reverse Mortgage Funds For

Getting hold of the loaned amount can be a little predisposed to mismanagement. It would be wise to have a clear and valid set of objectives prior to incurring the costs of this type of mortgage. As it was mentioned, reverse mortgage payments can be used to supplement pensions and other incomes, provide financial support for medical and therapy needs or to buy a second home. While it is true that a borrower has the freedom to utilize the money borrowed in whichever way they decide, the money (as in any value owned) should be spent wisely. One example of unwise use of the loan that can only bring the borrower to frustration and feeling of grave loss is to invest in risky investment deals. For seniors, having earned their right to the comforts of a home in their name and knowing they have safety cushions to enjoy the rest of their golden years are enough without the need to be burdened with thoughts of how to survive day by day because of losses incurred from an investment deal that did not yield favorably.

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