Increased gas prices, home insurance, inflation and the cost of living is sky high at the moment and it seems that everyone is feeling the pinch. These days a social security cheque, small retirement fund and savings will not fill the financial void. Those aged over 62 years are seeking other forms of payment for help.
If you are in this position and are equity rich, the reverse mortgage could be an ideal solution for you. The reverse mortgage will give you an extra income for as long as you live in your house and you will be able to take cash from your home without making anymore payments.
However, it is important you consider both the pro’s and con’s of the reverse mortgage before making a decision:
- There is no monthly payment due until the homeowner moves, passes away or sells the home.
- A good credit rating and income is not apart of the qualification process, this means it is easy to qualify for a reverse mortgage.
- Regardless of interest rates, you will never need to pay back anymore more then the value of the house.
- If you make your home your primary residence, you can receive the reserve loan payments for as long as you live in the property.
- High repayment costs
- Too much income for low-income seniors will mean they are over the allowable limit for liquid assets.
- Reverse mortgages may not allow you to have access to all your equity, or even most of it.
Always seek advice from an impartial financial adviser to ensure you are told both the pros and cons in detail.