Reverse Mortgage Home Loans Help Seniors Retire Earlier

By Nathaniel Hutchinson

As prices rise and life expectancies ascend, many retirees struggle financially. A lot of banks provide reverse mortgage loans for seniors to help them manage their expenses and retire earlier. Here’s why (and how) you should take advantage of these loans, so you can retire when you want and maintain the lifestyle you are accustomed to.

How They Can Help

Reverse mortgages are loans that let homeowners borrow against their home’s equity; however, unlike standard home equity loans, lenders do not require repayment of the loan unless the borrower dies, the property is sold or the owner decides to leave.

Available to seniors aged 62 or older, these loans provide monthly cash that helps offset daily and monthly expenses. While standard home equity loans require consistent monthly payments and a minimum income-to-debt ratio, reverse mortgage loans are available to all seniors, regardless of their income level. Additionally, instead of making monthly principal and interest payments, the borrower actually receives money based on a particular payment schedule he or she selects.

How Much Money Can I Get from a Reverse Mortgage Loan?

This depends on how much equity you have in your home. Typically, the older a homeowner is, the more valuable his or her property will be. Additionally, the lower current interest rates are, the more money you will typically get. You will be required to pay insurance expenses and real estate taxes; however, you can’t be forced from your home even if you are delinquent on your remaining mortgage payment.

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