How a Reverse Mortgage Can Help You Make Your Monthly Payment
Reverse Mortgage
Mortgages are long-term, low-interest loans used to finance homes. Over time, homeowners build up equity in homes by paying off mortgages.
Due to the long loan terms of mortgages, most commonly 15 or 30 years, you’re susceptible to enduring major lifestyle changes that result in financial difficulties. After missing even one monthly payment, lenders can repossess your home.
Reverse mortgages can preserve the home equity you’ve worked hard for.
What Are Reverse Mortgages?
Although financial institutions can foreclose upon your home at any time for nonpayment, you retain equity in your home as long as you avoid foreclosure.
You can trade this equity for cash with a reverse mortgage. Also known as home equity loans, reverse mortgages promptly provide you a lump sum of cash after approval.
Repaying These Home Equity Loans
One of the greatest benefits of reverse mortgages is that you, personally, will never have to repay your lender.
These home equity loans are due for repayment when you pass away, permanently move away from your home, the home you borrowed the reverse mortgage against is sold, or you fail to pay property taxes or other necessary financial obligations.
Assuming you’re still alive, you retain ownership in your house if you successfully repay it soon after moving or selling it.
If you pass away, your spouse or estate will have the option to repay the reverse mortgage.
Opting to not repay the home equity loan may result in foreclosure. Fortunately, your spouse and family members won’t be penalized for choosing not to repay the loan.
A Reverse Mortgage Is Ideal for Short-Term Financial Problems
Reverse mortgages are not ideal for long-running, deep-seated financial issues. For example, if you suffer a debilitating permanent injury and can’t work again, downsizing your home and otherwise reducing your expenses are your best options.
However, temporary issues like unexpected job loss or falling victim to a financial scam can be patched up reliably by reverse mortgages.
In other words, as long as the reason for your soon-to-be-missed mortgage payment is temporary, these helpful home equity loans are ideal for you.
Have Things Changed? You Have a Right to Cancel
The majority of reverse mortgages allow you to cancel them for any reason without penalty.
Your right to recission is typically available for at least three days after finalizing your reverse mortgage. This right is protected by the United States Federal Trade Commission.
Reverse mortgages are novel forms of financing that can keep your home from being foreclosed upon.
Be careful to use these home equity loans only when you need them.
Category: Mortgage
