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When is a Reverse Mortgage Necessary?

By July 18, 2019 September 3rd, 2019 No Comments
Buying a House with a reverse mortgage

Retirement is the time in your life that is reserved for consistency, relief, and comfort. Unfortunately, many of us get stuck with uncertainty based on financial stress or instability. There is an alternative contrary to what many individuals believe. While returning to the workforce can seem like the only substitute for financial support or preservation, that just is not the case.

Reverse mortgages can serve as a real opportunity for many couples and individuals in their retirement. This option can keep you in the comfort of your home without the impending weight of payments. It can also keep you an active member of your family without an expectation of responsibility put onto your children or grandchildren. 

Money in Your Home

According to the Federal Housing Finance Agency’s  (FHFA)House Price Index (HPI), the value of homes rose in every state. No surprise to locals that have been around for a while, Idaho experienced the highest rate of increase with a 15.1% annual appreciation boost at the end of 2018. This is incredible news for those looking into equity-based loans because increased property value increases the home’s equity. A result of increased equity is extended loan values, relative to a reverse mortgage.

With elevated loan funds becoming available to Idaho homeowners, these individuals are able to invest their loan funds more comfortably. Spending time with one another, extended families, friends, and even looking into new experiences can have a drastic, positive impact on quality of life. While these terms and circumstances that ought to be considered with your family, reverse mortgages offer seniors or those in retirement the lifestyle they have become accustomed to without the concern of financial depletion.

Careful Consideration for Any Loan

As mentioned above, any loan should be given due diligence. Thoughtful consideration of all parties involved or impacted should be made in order to determine whether or not reverse mortgage is a realistic option.

See a Reverse Mortgage Specialist

It is also important that Treasure Valley homeowners looking into reverse mortgages speak with a specialist. Many loan officers are not well-versed in the fine print of these loan options. Unfortunately, this can lead to mistakes, miscommunication or misunderstanding in the lending process.

There are three loan options within this branch of the loan industry, each with its own unique opportunities and details. A general loan officer may not be able to speak to which pathway with cater to you, your partner, and/or your financial situation.

It is also important that you have a good idea of how and when to repay your loan. Because reverse mortgages do not require monthly or annual payments like most loans, you and your family should feel confident in the expectations of loan payment. No one wants to be surprised at the end of their loan term.

Ultimately, speaking with a reverse mortgage specialist will put your best foot forward with the appropriate lending option for your needs, your family, and your future.

Strategic Spending

There are a few variations of these loans so make sure you discuss what requirements or thresholds are expected of you as the borrower, if any. There are also different disbursement options available. Whether you need a lump sum, term, tenure, line of credit, or combination, discuss what you will be using the money for and how it will be used over time in order to pinpoint the strongest plan for your situation.

After speaking with your reverse mortgage specialist and fully understand the expectations or requirements of the loan, it is important that a strategic financial plan is organized. Whether an annual, semi-annual or monthly spending plan is generated by yourself, your family, or a professional financial planner, carefully allocating these funds toward your lifestyle and retirement blueprint is crucial to ensure that you don’t overspend.

It is never anyone’s intention to have to seek out alternative finances during retirement. Although, the fact of the matter is that it can happen. Instead of looking to foreclosure, bankruptcy, or support from your extended family, consider reverse mortgage loan options and opportunities to stay independent and secure in the comfort of the home you have already built to fit your life.

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