| What are the Benefits of a Reverse Mortage? |
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Reverse Mortgages have been around for more than 40 years. But as any 40-something-year-old, they’ve seen lots of changes over time. How can YOU benefit?
Innovative Uses of a Reverse MortgagePurchase long term care insurance. Long term care insurance pays for necessary medical or personal care service provided outside of a hospital setting, such as in a nursing home or the policy holder’s home. Many financial planner recommend that their clients purchase long term care insurance to help fund prospective medical and care costs. Typically, neither Medicare nor Medicare supplemental insurance cover the cost of these services. Purchase a life insurance policy. Purchasing a policy can assure the legacy you leave retains its value. Postpone Collecting Social Security For young retirees, a Reverse Mortgage may be used to supplement income and forestall initiation of social security payments that are then substantially larger at an older age. For example, a borrower who would have been eligible for $1700 monthly social security benefit at age 62 may be eligible for a benefit of $3100 at age 70. Using a Reverse Mortgage for cash needs during the interim period can be extremely beneficial to the borrower. While closing costs may seem expensive, the payback period is short (differs in each individual situation) compared to increased Social Security proceeds over a lifetime.
How does a Reverse Mortgage differ from a home equity loan?While both loans enable you to turn equity into accessible dollars, you must make regular monthly payments (as soon as your loan is funded) to repay a traditional home equity loan. Therefore, you must qualify for the loan based upon your income and credit. If you fail to make timely payments, your lender can foreclose on you and you can be forced to sell your home. With a Reverse Mortgage, you do not repay the loan until you no longer live in the home. Your income is not considered when qualifying for the loans. You cannot be forced to sell your home if you cannot make a payment since THERE ARE NO PAYMENTS! |


Benefits

