![]() ![]() Some critics of reverse mortgages consider the costs to be a downside. Reverse mortgages also require an upfront insurance premium and an ongoing insurance cost. Like any mortgage, a reverse mortgage carries fixed costs, such as closing costs and other fees. tax payments and keep the home to FHA standards. The borrower must maintain homeowner’s insurance and property.Home equity must be sufficient to qualify (generally 50%).A borrower must have an age minimum of 62 years old.That loan payments will be received as agreed upon under the loan terms.The guarantee that a borrower and their heirs will never owe more to repay the loan than the home is worth at the time of sale. ![]() Protections for some spouses of reverse mortgage borrowers.As a result, FHA insurance provides some important borrower protections: ![]() HECM borrowers must pay insurance premiums associated with the loan. Others use the proceeds for a rainy day or an unforeseen health event. Some borrowers use their reverse mortgage proceeds to pay for in-home care costs or to help reduce the caregiver burden shouldered by children or other family members. A reverse mortgage can provide financial flexibility and freedom during retirement because the loan proceeds can be spent as the borrower chooses.Ī reverse mortgage can even be used to purchase a new home through a specific type of reverse mortgage for purchase transactions. For an individual or a couple that needs to make home modifications for aging in place, for example, a reverse mortgage can help pay for improvements. A reverse mortgage can offer many benefits to senior borrowers. ![]()
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