Be Aware of Reverse Mortgage Financing Options
Reverse Mortgage Financing
Reverse mortgages sound like a great deal, but it's important for seniors as well as family members to be aware of reverse mortgage financing options.
Like many, I was concerned that my parents didn't have enough money on a monthly basis to take care of their expenses, especially when my mom got sick and needed several hundred dollars worth of prescription medications on a monthly basis. They looked into reverse mortgages, and I wanted to do more, so I did a little research too.
I found out that a number of financing options were available. One of the ones that appealed to us most was the ability to access funds based on the equity that had accrued for their home, allowing them to designate an amount of cash that they would receive on a monthly basis.
However, they could always change their mind and opt for an open credit line of sorts as a result of the reverse mortgage process. These types of loans are very similar to a traditional home equity loan, but it bases its credit cap on the equity built up in your home. Your "credit line" cannot exceed the amount of equity.
While there is certainly a number of benefits to obtaining a reverse mortgage, it's important for seniors to read and understand the fine print.
If the house sells, they move out, or the homeowner dies, the loan amount, plus any interest accrued in the lone needs to be paid back in full.