A reverse mortgage has become a viable option for many homeowners looking for another source of income and immediate cash-flow savings. It lets you borrow against the equity you have earned in your house. The main appeal of this loan is that it doesn’t require monthly payments, but you do need to pay taxes and homeowners insurance, as well as maintain the property.
This special type of mortgage is not for everybody, but it can be a great help to get access to cash and extend your retirement savings. St. Louis reverse mortgage companies share some of the things to take note of when considering the type of loan:
You have to be at least 62 years old and own the home outright. You also have to be a resident of the property. If you have a remaining loan balance, it should be low and can be paid off with the proceeds from the mortgage.
You will not need to repay the mortgage, as long as you live in it (as your primary residence), pay the related expenses on time, and maintain the house. If you sell or move out, the loan must be paid off. The same is also true if you don’t pay the insurance and taxes.
Taking out a reverse mortgage has upfront and ongoing fees. This is why before applying, you need to determine the amount of fees you will have to pay, so that you’ll have enough money for covering other expenses. You can also talk to a reliable lender to learn more about it.
The title of the property still remains with you. When the house is sold, you or your estate will have to pay the lender the money you received from the loan, including the interest and other fees. You and your heirs have the rights to any remaining equity in the property.
If you’re thinking of getting a reverse mortgage, be sure that you know your obligations and what can happen if you don’t meet them. Talking to a reliable mortgage company or lender can help.