A reverse mortgage is a loan taken out of the equity in your home that you have raised over time. You may wonder: why take funds out of your home, especially if you have worked hard to pay off a mortgage? The answer is simple: Your home is and asset, and therefore can be a valuable tool to improve your finances. Reverse mortgages can help you pay off debt, make home repairs, or purchase a second property.
How Reverse Mortgages Work to Benefit You
With a reverse mortgage, you will be taking out payments from the mortgage you already made. Sometimes this is a great way to help you get cash that you can use to benefit yourself financially. You will want to make sure this plan will really have a positive outcome. You will be charged interest and fees to complete the process. Be sure that you can pay off a reverse mortgage, because if you cannot, then you may have to sell your home.
Types of Reverse Mortgages
The main type of reverse mortgage is known as a home equity loan. There are government sponsored programs, such as the Home Equity Conversion Mortgage (HECM) that can come with many perks. Some lenders base the amount you can get out of this program on your age and how long you have owned your home.
One benefit of an HECM is that you will get support from a government housing counselor. They will help you review your income, home value, credit score, debt, and additional financial responsibilities. The counselor will then notify you if a HECM makes sense and can also help refer you to other programs. This way, you can feel more confident you’re making the right choice.
Other Reverse Mortgages with Benefits
If you cannot us an HECM, then you can apply for a single purpose reverse mortgage. As the name implies, you can use these funds for a single specific purpose: such as an energy upgrade or another renovation that will bring up the value of your home. Many government and nonprofit agencies provide purpose reverse mortgage programs that economically benefit homeowners. Many of these programs are designed to help increase assets and help people pay off their debts.
You can also consider using proprietary reverse mortgages. Many are provided by private banks with specific benefits and programs. If you wish to increase the value in your home or raise its worth, you can speak to a lender about the various programs available. Since the bank creates the program terms, there can be many flexible ways to benefit from a reverse mortgage.
The experienced team at Professional Mortgage Solutions is here to help you benefit from a reverse mortgage. Contact our friendly staff in Rego Park, NY today.