Aug 28 2008
Easy retirement with reverse mortgage
After working one’s entire life, everyone looks forward to the peace and relaxation bought with their retirement. After toiling for years it is now the time to reap the benefits of your hard work. But is this rosy and ideal situation being disfigured by thoughts that there might not be enough cash stashed away in your bank account to enable you a smooth sail? Well fear not, help is at your hand. A government sponsored financial aid program of reverse mortgage is devised specially for individuals with age of 62 years or above and is intended to help stabilize cash flow for them after their retirements.
In simple terms, a reverse mortgage provides homeowners qualifying for the mentioned age bracket with the option of claiming equity on their house of residence without having to move out or sell it. It may be noted that this little different from home equity. The mortgage company gives borrower the control over selection of the mode of payment desired by them when they opt of reverse mortgage. The funds can be made available to the borrower in three ways, it could either be given as a onetime lump sum amount, or, the entire amount could be divided into monthly allowances or could be made available as a Line of Credit. It depends on the borrower how he wishes to avail the facility of equity provided by reverse mortgage. The amount of funds which can be made available using the reverse mortgage is dependent on various factors, the important ones being the age of the borrower, the value of the house, the location of the house and lastly, the mortgage interest rate at that point of time. All these factors combined together help in asserting the funds which can be given to the borrower.
Making reverse mortgage all the more alluring is the fact that the amount which is funded here is entirely tax free. To add on to that, there are number of mortgage brokers and actual mortgage lenders who can provide you best deals in view of the high competition. However, if there is any other mortgage or any other financial aid on the house, it has to be cleared completely before availing the reverse mortgage facility. While a majority of the senior members utilize this fund as a supplement to their current income, others make use of it in paying prescription bills, medical expenses or on the maintenance of their property. With this program gaining popularity, reverse mortgages have surely proved to be a boon for the senior citizens.