• Toni F. Ryan

62 or older? The Pros & Cons of Reverse Mortgages




A reverse mortgage is an increasingly popular loan for senior homeowners age 62 and over. It allows senior homeowners to tap into their current home equity or purchase a home without using all their cash. There is no monthly mortgage payment but homeowners are still responsible for paying property taxes, insurance, and maintenance. The repayment of the loan is deferred until the homeowner dies, sells or moves out of the home.

To qualify for a reverse mortgage loan you must own a home, be at least 62 years old and have enough home equity. The loan works in two ways. First, payments are made to the borrower based upon a percentage of the equity that has been built up in the home. Second, any current mortgage is paid off thus eliminating the monthly mortgage payment. The loan is repaid when the borrower sells the home, moves out of the home or dies. The factors that impact the amount you are eligible for include your age, the value of your home, interest rate and loan limits.

As with any large decision, it's important to understand the pros and cons.


Pros:

• You continue to live in your home and retain title to your home, as long as you continue to pay your property taxes, insurance, and maintenance.

• You generally receive the proceeds of the loan as tax-free cash in which you can use the money as you see fit. It is recommended though to speak with your financial advisor to verify your specific situation.

• You no longer make monthly mortgage payments, during the course of the loan. You do have to follow the constructs of the loan guidelines and are responsible for paying your property taxes, insurance and maintenance.

• A reverse mortgage is a non-recourse loan. Neither you nor your heirs are liable for any amount of the mortgage that transcends the value of your home.

• There are several ways in which you can receive the proceeds of the loan.

• Many lenders offer a free reverse mortgage loan calculator which allows you to get an estimate as to how much you may qualify for.


Cons:

• Fees associated with the loan are generally higher than with other financial products. You should ask your lender about options available.

• The balance of the loan increases over time as does the interest on the loan and the fees associated.


Contact a mortgage professional to learn how you can use this valuable tool to enjoy your retirement.



ABOUT THE AUTHOR


Toni F. Ryan | NMLS#230507

Senior Loan Officer | Synergy One Lending


Toni F. Ryan has over 20 years experience in mortgage lending - both on the wholesale and retail levels. She believes that education is key to making the best decision for YOU! She shares her insight into the lending world here and encourages your feedback. Don't forget to connect on Facebook!

The information contained herein is for informational purposes and should not be construed as personal advice. Please consult your mortgage professional BEFORE making any changes to your financial profile. No guarantees or promises are expressed and by visiting this site, you agree to not hold Toni F. Ryan or Synergy One Lending responsible for any decisions you make based on the information stated. All of the content here is the sole property of ToniRyan.com and cannot be duplicated without express written consent. If you choose to reference this material - please include a link to the source and state the authorship clearly.Synergy One Lending is licensed by the California Department of Business Oversight under the California Residential Mortgage Lending Act, Synergy One Lending Inc. NMLS 1025894. 3131 Camino Del Rio N 190, San Diego, CA 92108

© 2019 by Toni F. Ryan - NMLS#230507

Direct/Text (530) 305-7668  |  tryan@s1lending.com

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(530) 305-7668

Synergy One Lending Inc., NMLS 1025894. 3131 Camino Del Rio N 190, San Diego, CA 92108. Alabama Consumer Credit License #22123; Arizona Mortgage Banker License 0926603; Arkansas Combination Mortgage Banker/Broker/Servicer License 109250; Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act – California License 4131356; District of Columbia Mortgage Dual Authority License MLB1025894; Hawaii Mortgage Loan Originator Company License #HI-1025894; Illinois Residential Mortgage Licensee #MB.6761115; Maine Supervised Lender License 1025894; Maryland Commissioner of Financial Regulation - Mortgage Lender License 21678; Minnesota Residential Mortgage Originator Exemption #MN-OX-1025894; Nevada Mortgage Broker License #4317. Licensed by the New Hampshire Banking Department 19926-MB; Licensed by the New Jersey Banking and Insurance Department – New Jersey Residential Mortgage Lender License 1025894; New Mexico Mortgage Loan Company License 1025894; Oregon Mortgage Lending License ML- 5208; Rhode Island Lender License #20163229LL. Rhode Island Loan Broker License #20163230LB; Vermont Lender License 6891. Washington Consumer Loan Company License CL-1025894. Toll Free #: (877) 978-1922. Subject to Credit Approval. www.nmlsconsumeraccess.org

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