Three Things About Reverse Mortgage Programs You Might Not Know
About 49 million US residents turned 65 years and older in 2016, which is about 15% of the total population. Many of these people are baby boomers, about 80% of whom own their own homes. Unfortunately, they do not have much else.
Many retirees struggle to make ends meet on their monthly pensions because of high healthcare costs. Those who own their own homes turn to reverse mortgages to add to their income. It is the perfect fit for some homeowners over 62, but not for all. Here are three things you may not know about a reverse mortgage program, according to Primary Residential Mortgage, Inc.
Any homeowner over 62 can qualify for a reverse mortgage. However, what you might not know is that the older you are, the more cash you can get. This is because reverse mortgage calculations include the probable term of the loan. This makes sense because the loan matures when the borrower dies or sells the property, whichever comes first.
Not all reverse mortgage lenders are alike. The interest rate you get for a reverse mortgage program will depend on the lender. Reputable lenders follow strict regulations that protect reverse mortgage borrowers. When choosing a lender, find one with a good reputation in the market. Ask friends, family, and your financial adviser for recommendations.
The money you receive from the lender will not be the amount of the loan. This is because you have to pay for fees and costs. The first thing that will take a chunk out of the money is any balance left on your mortgage. Even if you have fully paid the mortgage, you still have to pay for mortgage insurance, application fees, lender fees, and closing costs. Your lender is obligated to explain all these costs to you before you commit to an agreement. If this does not happen, find another lender.
A reverse mortgage program is a good way to add to a retiree’s monthly income. However, it is not without costs. You’ll be all right as long as you know everything you need to know about reverse mortgages from your lender. To be on the safe side, find a lender with a good reputation for taking care of their clients.