Some people say that parents don’t need to save up for their kids’ college education. There are college loans to help them. But, their parents can’t find a loan that will help them live a comfortable life after retirement. But, wait for a second. Are you sure there’s no loan for that? Isn’t a reverse mortgage loan the perfect option for seniors?
What Is A Reverse Mortgage?
Reverse mortgage loans is comparable to a line of credit or loan against your home equity. One main difference is that the lender will pay you and not the other way around. Through this type of mortgage, you will have the cash you need. It will supplement your retirement funds like the benefits you get from social security.
An HECM is a popular mortgage type, which represents around 90% of the total number of reverse mortgages.
The house is one asset that seniors tend to forget. They often neglect to include them when planning for their retirement. These loans are good ways of making the most out of the equity of their house. It will pay for retirement costs while not having the need to give up their house. This type of loans may be a good option for those who are house rich but cash poor.
Who Can Get Reverse Mortgage Loans?
People who are at least 62 years old and own a home can apply for these loans. In case there is an existing mortgage on the house, the remaining balance should be small. This way, it could be settled using the money you get from your reverse mortgage in Myrtle Beach. The house which you are taking your loan against should be your primary residence. It is also important that you are not delinquent on debts like federal student loans or federal income taxes.
What Are Your Financial Obligations?
The borrower of the reverse mortgage in Myrtle Beach needs to be responsible for maintaining the house. They will also pay the HOA dues, property taxes, utility bills, flood insurance, and the homeowners insurance.
How Much Can You Get?
The amount that you will receive will depend on the younger borrower’s age, the HECM FHA limit, and appraised value. The proceeds of the loan increase with the borrower’s age and decrease if the interest rates are higher.
In case the spouse of the borrower is less than 62 years old, the spouse won’t be eligible to become a borrower. But, the proceeds of the loan would be based on the younger age of the spouse, so the spouse could stay in the home following the death of the borrower, in case the borrower passes away first.
This loan comes with a limit of 50 percent of the equity of your home. The loan applicant could borrow over 50%. This applies when they use the proceeds of the loan to settle their existing mortgage.
How Will You Get The Money?
In case you have a variable interest rate, then you can get the funds through different options. You can get it as a credit line, lump sum or as level payments. All these applies as long as you reside in the house or as level payments for a fixed term. If you have a fixed interest rate, then you will get the money as a lump sum.
Interest will be charged on how much you get, after you receive it. Because you don’t make regular payments unlike a conventional mortgage, you can expect the interest to pile up and compound, which means it will eat into the equity of your home.
Is The Loan Taxable?
Since it’s just like getting an advance on the loan, the money that you get from your loan is not taxable. Given that, loans doesn’t affect Medicare or social security benefits. But a reverse mortgage could have an affect on your public benefits like Medicaid and SSI, if you just save and do not spend the money you get from the loan.
Call David Stacy Reverse Mortgage Specialist now and find out if this type of loan is the perfect option for you as part of your retirement planning.
David Stacy Reverse Mortgage Specialist
Myrtle Beach, SC 29577
(843) 491-1436
https://www.reverse-info.com
Areas Served: Myrtle Beach, Little River, Surfside Beach, Forestbrook, Conway, Socastee, North Myrtle Beach, Carolina Forest, Columbia, Charleston, Greenville