If you are one of the millions of senior citizens approaching retirement with less financial security than you had ever imagined possible, you may be overlooking one of your biggest financial assets--your home. If you have paid off your mortgage completely, or almost completely, you can consider taking out a reverse mortgage loan.
A reverse mortgage loan will allow you to get cash, a monthly payment, or a line of credit based on your home’s appraised value; you will continue to live in your home; and the loan will not have to be repaid until you leave your home permanently or sell it. A reverse mortgage loan is not the same as a home equity loan, and the older you are, the more of your home’s appraised value will be available to you as a reverse mortgage loan.
Precautions
While a reverse mortgage loan sounds too good to be true, however, there are precautions you must take when applying for one. Many applicants for reverse mortgage loans fall victim to unscrupulous loan brokers or lenders who attach undisclosed fees to their services. Those unfortunate applicants end up with far more less money than they expected.
You owe it to yourself to become educated in the entire process which accompanies reverse mortgage loans, so that when you do apply for one you will recognize any warning signs before it is too late.
In order to qualify for a reverse mortgage loan, you need to be at least sixty-two years of age. As mentioned above, you should have completely, or very nearly, paid off any outstanding loans on your house.
Those who do owe money on an existing mortgage or home lien will have to use their reverse mortgage loans to pay those off before they can spend it one anything else. And reverse mortgage loans are binding, so if you find after committing yourself that you were unhappy with the terms, you will have no recourse.
Finding A Good Lender
The best way to ensure that you will be happy with your reverse mortgage loan is to work with a trustworthy lender. You can easily find the names of several lenders in your area on the National Reverse Mortgage Lenders Association--NMRLA--website; just enter the name of the state where your home is located, and sort through the large list of names which comes up to find lenders near you. All the reverse mortgage lenders on this site have agreed to operate under the Code of Conduct established by the NMRLA for the protection of senior citizens.
As an extra precaution, you would be wise to have an attorney familiar with reverse mortgage loans review any contract before you actually sign it.
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