A lot of homeowners have probably heard of a reverse mortgage but there it is still not clear of what it means exactly. A reverse mortgage provides the opportunity to borrow based on your age and the amount of equity that has been built over the years on your primary residence. When searching for a reverse mortgage in Colorado Springs, it is important that you’re first having an understanding of what it entails so that you know what you’re dealing with from the onset.
What is a Reverse Mortgage?
The reverse mortgage was first introduced in 1989 and was primarily designed for older homeowners. The typical age was 62 and above and the program was to enable such individuals to easily access loans by using their primary residence as equity. The homeowner will take a loan that they don’t necessarily have to pay back until they sell the home or pass away.
There are qualifications that are required in order to get a reverse mortgage and it is important to understand them if you’re looking for such a form of financing. It should be noted that there will be no monthly payment with a reverse mortgage. The lender will give the homeowner the total sum primarily based on the age of the recipient. The older the homeowner, the bigger the pay you can expect from a lender.
When the person passes away or sells the home, the lender will want to be paid and that will happen from the proceeds that come from selling the home.
Reason For Choosing a Reverse Mortgage
There are a couple of reasons why you’d want to go for a reverse mortgage instead of going the conventional route. There are circumstances that could mean that the homeowner doesn’t have a lot of money to live off. One of the main advantages of a reverse mortgage is that you’ll not have to pay it back immediately. You get to have the money that you require and the payment can be done when you sell the home or pass away. It could be seen as the perfect solution for someone that is aging.
The Challenges of a Reverse Mortgage
There are disadvantages to working with a reverse mortgage. The fees and closing costs are usually compared to when you get a normal mortgage. You can also expect high interest rates compared to traditional mortgages.
The homeowner will be expected to keep the home in good condition and ensure that the property taxes are paid. The majority of people that will opt for a reverse mortgage could be having difficulties with finances. They might not want to incur all the costs that come with homeownership.
One of the challenges will be the loan complications that will make it hard for heirs to inherit the property. A reverse mortgage should be the last resort when you don’t have many options left. When you think about the high closing costs and interest rates, it might not be worth it in the end if you have alternative options. For more information, you can check out https://reversemortgagerevolution.com/
Name: Kevin A. Guttman – Reverse Mortgage Specialist
Address: Colorado Springs, Colorado 80919
Phone: ph: (719) 302-5820, toll free: (877) 251-9709