There are trends that suggest that many American households are not as prepared for retirement as they should be. With rising costs of living as well as longer life expectancy, more and more people are finding themselves and their family members coming up short on funds to secure a comfortable retirement.
Penny Lane Financial is excited to help you navigate the rough waters of preparing for retirement in hopes to make way for smooth sailing. For some, a reverse mortgage might be a fantastic option and we're here to answer any questions you might have and help decide if it's the best option for you or your loved ones.
What is a Reverse Mortgage?
A reverse mortgage is a loan that allows homeowners over the age of 62 to convert a portion of their home equity into cash. This type of loan is especially beneficial to people who may want or need supplemental funds for a comfortable retirement.
One of the benefits of a reverse mortgage is the elimination of monthly mortgage payments, which begins after your existing mortgage is first paid off. With a reverse mortgage, you remain the owner of your home, so you must continue to pay property taxes, homeowners insurance and must be sure to maintain the well-condition of your home, even if you don’t have a mortgage payment.
Reverse Mortgage Eligibility And Qualifications
To be eligible for a reverse mortgage, you must meet the following criteria, at a minimum:
You must be 62 years or older.
You must have enough equity in your home – about 50%, but the required amount varies by lender.
You must attend a counseling session from a Department of Housing and Urban Development-approved counselor to learn more about the loan and your options.
You must go through a financial assessment to ensure you are in the best position to be successful with your loan.
Along with these requirements, your home also needs to qualify for the loan. Here are a few basic requirements:
The home must be your primary residence.
The home must be in good condition and meet FHA standards.
The home cannot be a manufactured or mobile home.
If the home is a condo, it must be on the HUD/FHA approved condo list. If it is not, you may still be eligible for a proprietary reverse mortgage
Penny Lane Financial is always here to educate you, talk with you, be your friend and help set you and your loved ones up with the tools you need for a successful retirement strategy. Please contact us with any questions or concerns.