After retirement, life can really get tough. This is especially when you do not have a financial backup plan. If you are a cash-strapped retiree or you have your net worth trapped in your home, then reverse mortgage Arizona will heave a sigh of relief.
Reverse mortgage refers to a loan, available to seniors aged 62 years and above, and who have considerable home equity that they can borrow against. The amount borrowed is paid out either as a lump sum, a fixed monthly payment, or as a line of credit.
Several advantages accrue from taking the reverse mortgage. The advantages provide perfect reasons why homeowners need to consider a reverse mortgage. Let us review some benefits of applying for the reserve mortgage.
1. There is no limitation on how to use the cash from the reverse mortgage
Do you want to renovate your current home but you cannot afford the cost right now? Better still, for seniors who are looking for the easiest way to pay for a medical cover during retirement, you have the reverse mortgage Arizona as your perfect option. A reverse mortgage gives the applicant freedom to spend the amount in whichever way they desire.
Compared to taking a conventional loan, the reverse mortgage is a much better option if you want to finance your retirement living. With that in mind, there is no need to worry about financing your medical cover even after retirement. You can also use this cash to finance your vacations or even boost your business, in order to increase the cash flow.
2. You are not required to make any monthly repayments on the reverse mortgage
So long as the home you have borrowed against remains your primary residence, you do not have to use a single cent as a repayment of the reverse mortgage. Remember that you have borrowed against your home, and the amount awarded does not exceed the value of the property anyway. Therefore, unlike the traditional mortgages, you enjoy peace of mind knowing that no monthly repayments are falling due.
With a reverse mortgage, you will receive funds, and repay when you are selling the property. In case of sudden death, the reverse mortgage lenders will sell the property to recover the amount loaned to you.
3. A reverse mortgage lets the homeowner keep the property
A common misconception is that the lender takes full ownership of the property when they award you the loan. The truth is that, with a reverse mortgage, you continue enjoying the full property ownership.
Consider that this is a Home Equity Conversion Mortgage. This means that you borrow against the actual value of your property. Therefore, you enjoy full occupancy rights until such a time when you abandon the property for another one. However, it is the obligation of the homeowner to pay for property maintenance and other bills associated with the property.
4. The reverse mortgage offers protection in case the property market is on the decline
The reverse mortgage is one of the loans that are insured by the Federal Housing Administration. Therefore, in the case of property value declines, and the amount you borrowed is more than the actual property value at present, the Federal Government covers the difference. This means that even in case you are planning to sell the property to repay the loan, the difference is already covered, despite the declining property value at that time.
5. The reverse mortgage gives the borrower the freedom to choose a disbursement option
Each reverse mortgage borrower has unique requirements. To cover the needs, you may require a particular disbursement approach that favors you as the borrower. You might opt to receive a lump-sum payment upon reverse mortgage approval or even go for the partial amounts. Other disbursement options available are a line of credit or monthly payments. Even better, you might opt for a combination of these disbursement options.
How do you qualify for the reverse mortgage?
To apply for the reverse mortgage, firstly you must have attained the age of 62 years and above. The second requirement is that your home equity should be adequate to secure the amount that you are borrowing. The reverse mortgage can be repaid voluntarily, in part of the full amount. This means that if after taking the reverse mortgage you have found an alternative source of money, you can use the cash to pay off the reverse mortgage.
When you apply for a reverse mortgage, you remain the rightful owner of the property. Therefore, the allegation that you lose the ownership of the property to the lender is wrong. However, remember that any bills that you are expected to pay must be settled as they fall due. You can use the funds received through a reverse mortgage plan to pay these bills. Lastly, the reverse mortgage gives the borrower the freedom to use the money in whichever way they want.
Are you ready to apply for the reverse mortgage? For reverse mortgage Arizona, talk to SunAmerican, the best reverse mortgage lenders in Arizona.