Reverse mortgages serve as an opportunity to provide stability and support. Unfortunately, its reputation has soured a bit from inexpert influence. While often misconstrued as a last-ditch effort solely utilized by the retired community, the benefits of a reverse mortgage can be reaped by anyone in the home-owning community. Here are some of the untold advantages of reverse mortgaging:
“Use your home to stay at home” – The National Council on Aging(2018)
Reverse mortgages allow individuals and families to maintain the comfort of home living during retirement. With the flow of cash coming in from a reverse mortgage, you can uphold and even improve your lifestyle and quality of life.
No monthly payments.
Depending on the loan type that is selected, you may never have to make monthly payments on the loan. While very few fixed monthly payment options are elected into, they can offer advantages. However, lump sum, line of credit, and other reverse mortgaging options allow for much less burden on the homeowner. As long as at least one borrower lives in the home at any given time, there are not typically any fees associated with the loan once it has been taken out. This allows the borrower peace of mind for the term length of the loan without the stress and strain of making a payment each and every month.
Home maintenance becomes a priority.
Because there are few initiation fees with reverse mortgages, lenders most often negotiate this by noting requirements about the quality of the home. While the homeowner resides in the home, reverse mortgages become an incentive to control and cultivate the assets of the home. Where many homes are dulled in retirement, reverse mortgages can provide external reassurance that the home is being utilized, cared for, and upheld as a product of a life well-lived.
There are federal regulations and protections for borrowers.
Because of the housing crash over a decade ago, many homeowners are concerned about protecting their assets. And they should be. However, in the case of reverse mortgages, there are borrowing options that have been regulated by the federal government to protect and ensure borrowers. Home equity conversion mortgages (HECM) has received quite a bit of federal intervention as a mortgaging program. In doing so, the government has provided oversight and support that benefit those who take out HECM loans.
Reverse mortgages can be used as an income planning resource.
If you are already in retirement and looking for a reliable source of income OR if you are planning prospectively, reverse mortgages offer home owning individuals and families a plentiful and balanced income for potentially 20 years of retirement. Additionally, borrowers like yourself can invest through their homes via a line of credit. And according to other industry experts, like USA Today financial expert Kerry Uffman from TWRU Private Wealth Management in Louisiana, this credit builds quicker and stronger than most conservative portfolio investments.
Where reverse mortgages turned into a bad guy in the lending world, we do not know. However, the capacity to do good and provide stability in a segment of life that can often feel uncertain is something that has become very clear for these kinds of mortgage options. With federal oversight, flexibility programming, and income consistency all provided for on behalf of the borrower, reverse mortgages can provide a competent and effective opportunity in retirement. And what is great about them is that you don’t need to be in retirement to start considering what lending pathway suits your experience best. Start looking today. Reach out to us for questions, concerns, or even Get a Quote Online!