Everyone deserves their later years to be as peaceful as possible. And part of that means not having to worry about money.
One great way to make sure that you have enough money to do what you love is by applying for a reverse mortgage. But a reverse mortgage is a bit of a complicated situation.
For instance, what exactly is it? How can you get approved?
It’s understandable that you want to have as much info as possible before making a decision. That’s why we’re walking you through a reverse mortgage FAQ below!
Reverse Mortgage FAQ 101: What is a Reverse Mortgage?
Let’s start off with an easy, yet important one: just what is a reverse mortgage?
At its core, a reverse mortgage is a loan in which a homeowner borrows money using his or her home as collateral.
Think of it as a more detailed version of a car loan. You put your home ownership up in exchange for a large sum of cash, which never exceeds the value of the home itself.
Payments are distributed on an agreed upon basis (usually monthly) for as long as the homeowner is alive.
If you’re still looking for more information, be sure to check out a previous blog post where we walk you through the definition in detail.
How Does It Work?
As described above, a reverse mortgage will never exceed the value of the home. Accordingly, determining the value of the loan itself is a bit complicated.
The first step is to speak a mortgage broker. He or she will assess the value of your home and use a complicated algorithm to determine your loan value.
Once you’re approved, you’ll receive a set rate of payments for years to come! All without monthly principal interest. Interest will need to be paid back, but you can work with your agent to determine exact details of when and how much.
Is a Reverse Mortgage a Scam?
This is one of the most commonly asked questions in a reverse mortgage FAQ. So is it a scam?
Not at all! In fact, there are plenty of measures in place to make sure that your reverse mortgage agent can’t and won’t take advantage of you. To do so would legally constitute elder abuse.
How Can I Get Approved?
Unfortunately, there isn’t a one-size-fits-all answer here. However, there are a few absolute musts that you’ll need to keep in mind.
First, you have to own your home outright. That means that all previous payments have been made and that the home is in your name.
Next, you’ll need to go through an approval process. This risk assessment is generally fairly quick. Be sure to speak with a lender to learn more about whether you qualify.
Finally, it needs to be an actual home. Unfortunately, this means that things like bed and breakfasts and timeshares aren’t included.
Get More Money For Your Home
Everyone deserves a great third act in life. Make sure that you and your family are prepared by getting in touch today.
Our office will help you get the most money for your home and would love to talk with you and walk you through the reverse mortgage process.
So what are you waiting for? A great financial future is just minutes away!