If you are a senior living in Indiana looking to raise finance to help in retirement, you may have heard the term reverse mortgage. There is still a lot of confusion and misconceptions surrounding this financial product. Here we answer the question "What is a reverse mortgage?" After reading this you should be able to decide whether this is an option that is worth pursuing.
A reverse mortgage allows you to turn the equity in your Indiana home into cash. It is only available to people aged 62 or over, so it tends to be used by retirees as a way of supplementing their income.
You can receive payment by way of a cash lump sum, a line of credit or a monthly income. The attractive thing for many customers is that there are no monthly payments to make, unlike a normal mortgage. The money that is drawn down is tax-free.
There are many baby boomers coming up to retirement that are realizing that the amount of income that they are going to receive during their retirement is not going to be sufficient to live on. This has led to there being a big increase in interest in reverse mortgages.
The money raised can be used for any purpose. This includes supplementing existing Indiana retirement provisions, paying for medical care or carrying out modifications to the house such as installing a ramp or downstairs shower. You could even use the money to go on a holiday of a lifetime or buy a new car.
While this sounds very attractive, are there any downsides to a reverse mortgage? The main one is the amount of equity in the property will be reduced when you come to sell it. This maybe important to you if you were planning on having your children inherit your house.
There are plenty of helpful resources available to you to further learn about reverse mortgages. You can choose to speak to housing counselor or find resources online.
Reverse Mortgage Calculator Aarp in Indiana
The high costs associated with reverse mortgages seems to be among the most significant arguments against taking out a reverse mortgage, one should remember that the expense of selling a house, which might include significant repairs in addition to the realty commission and closing costs, will often be higher than the cost of remaining in the house and getting a life time stream of income for as long as you stay in the home. In addition, it ought to be noted that the closing expenses are not an expense cost, the costs are financed into the loan, and not paid till the loan is settled at the time the homeowner permanently leaves the home.
If a reverse home loan is ideal for you or a liked one, informing yourself or a family member about a reverse home loan is the only method to genuinely discover out. Every senior that desires to request a reverse home loan should go through a no cost HUD counseling class to be sure that they totally comprehend how the reverse home loan works and what other options may be available to them. safeguards have actually been carried out by the federal government, since the first reverse home loans were presented in the 1980's. Today's reverse home loans are safe and deal independence and boosted lifestyles to many "home abundant and money bad" senior house owners. In depth information on reverse home mortgages can be found online.How To Get Out Of A Reverse Mortgage | Chase Reverse Mortgage