Is a Reverse Mortgage Right for You?

A Reverse Mortgage is a loan against your home that you do not have to pay back as long as you live there. You pay the money back plus interest when you die, sell your home, or permanently move out of the residence.

A Reverse Mortgage can be a great product for seniors who wish to access their home equity. But, there are some drawbacks and it is not for everyone.

Is a Reverse Mortgage right for you? Continue reading to find out.

Do You Need or Want the Cash?

The most important consideration when looking at a Reverse Mortgage is whether or not you need (or want) additional funds for retirement. Many people have opinions about Reverse Mortgages, but the reality is this: Reverse Mortgages can be a great way (and sometimes the only way) for seniors to get access to their home equity to use however they want.

Seniors are living longer than ever and many people need to tap their home equity to fund their longevity. Many people use Reverse Mortgages to supplement their retirement income, fund medical expenses, pay for education expenses, or even fulfill a lifelong dream like traveling.

Reverse Mortgages can also be a great way to eliminate your mortgage. If you have an existing mortgage against your house, a Reverse Mortgage may enable you to pay off that mortgage. So, you will save money every month by eliminating your mortgage payment and possibly still have cash available to you.

Are You Eligible?

For most seniors, the best news about a Reverse Mortgage is that – unlike a Home Equity Loan – there are not any income requirements to qualify. (Unlike a traditional mortgage, there are no payments on a Reverse Mortgage until you vacate the residence.)

But, there are other strictly enforced eligibility requirements for most Reverse Mortgages.

To qualify for a Reverse Mortgage you must:

• Be 62 years of age or older
• Be eligible for a loan amount sufficient to pay off all mortgages and liens on your property. In order to get a Reverse Mortgage, you must be able to qualify for at least enough money to pay off all debts that already exist on the property

The amount of money you can get from a Reverse Mortgage is determined using a calculation that takes into account your age, county, current interest rates, and the total value of your property. The amount of money you can get from a Reverse Mortgage must be more than what you owe on your home.

Typically, you will probably qualify for a Reverse Mortgage if you owe less than 50 percent of your home's value, but some people qualify owing as much as 80 percent of their mortgage. If you would like to find out how much you are eligible for and verify whether or not you have sufficient equity to qualify, try our Reverse Mortgage Calculator.

• Own and reside in your home
• In most cases second homes, apartment buildings and homes less than a year old are not eligible for a Reverse Mortgage
• Some companies may accept 2-4 unit owner-occupied dwellings, along with some condominiums, planned unit developments, and manufactured homes. Generally cooperatives are not eligible nor are homes that are less than a year old

Continue here to get rate quotes and find out if a Reverse Mortgage is right for you.