Important Things Burlington Homeowners Should Know About A Reverse Mortgage

Refinancing a home with a reverse mortgage has definite advantages for certain individuals in today’s market. Today, many mortgages are federally insured reverse mortgages. Among borrowers, there are certain qualifications. Borrowers must be at least 62 years old. They must own their property free and clear, or have only a small mortgage left to pay off at closing and they must talk to a credit counselor before applying for a reverse mortgage. If you can meet the qualifications, the advantages are many:

• For people who find they cannot live off social security, it increases the amount of money they have available month to month, tax-free.


• The borrower continues to live in their home, so there is no hand at your back, pushing you out.


• Reverse mortgages can be taken as lump sum payments, monthly installments or as a home loan line of credit to be used at the homeowner’s discretion.


• If you decide to sell the home, you can keep the difference between the price you get on the market and the amount of the reverse mortgage.


• If you stay in the home until you die and the proceeds from selling the home is greater than the amount of the reverse mortgage, your heirs get the difference.


• In the end, if the house depreciates and is worth less than the reverse mortgage, the FHA insurance pays the lender the difference.

For People Who Find Social Security is not Enough

Elderly homemakers occasioanlly feel a financial pinch. They may not believe their social security and other retirement funds provide as significant amount as they would like to make their life comfortable. For example, an elderly person may want to travel in retirement but feel a budget constraint. It’s possible to get a reverse mortgage that provides enough monthly income or a lump sum payment to give an elderly person greater flexibility in retirement to do the things they want to do.

For Elderly People Who Want to Stay in their Home

Elderly homeowners often prefer to stay in their home. Often, the mortgage is paid and the elderly homeowner owns it outright. To many retirees, their home is a nest egg. In order to enjoy the money in their home, they would have to sell it and move. A reverse mortgage allows the elderly person to stay in their home and enjoy the money their nest egg represents.

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