What Do You Do When You Find Yourself In Your Sixties Or Older And You Still Have A Monthly Mortgage Payment?
What do you do when you find yourself in your sixties or older and you still have a monthly mortgage payment? In many cases you may be on a fixed income with fixed assets so you’re options are limited.
• Liquidate assets to pay off the mortgage. The down fall to this is that the assets will then be tied up in your home and may be difficult to access if and when you need them.
• Continue working until the home is paid off. Who really wants to keep working just to cover a mortgage payment, when all they really want to do is retire?
• Retire, but have less income to live on until the home is paid off. What’s the point of retiring if you’re not really “living” during your retirement?
These are common solutions many homeowners resort to in order to afford their mortgage payment. There is also another solution that many people may be unaware of.
Ever Heard Of A HECM?
A home equity conversion mortgage (HECM), also known as a reverse mortgage, allows home owners 62 and older a way to not only pay off their current mortgage, but access additional equity in their home without needing to make monthly payments.
With a reverse mortgage the principal owed increases every month since you are not making payments. The payments, interest and mortgage insurance, are simply added to the loan balance every month. The equity in your home decreases, as payments accrue. Even though you do not need to make mortgage payments, you need to continue to pay taxes and insurance.
The amounts you can borrow are based upon your age, interest rates and reverse mortgage loan option you choose.
There are several options to choose from when you gain access to your home’s equity. You can get a lump sum, home equity line of credit, monthly payments as tenure (for however long you live in the home) or for a fixed amount of time. You can also get a combination of those options.
Common Reverse Mortgage Myths
If you have ever heard anyone say that a reverse mortgage is not a good idea or that they are risky, was more than likely saying that because they heard inaccurate information. In fact you may have heard things that may have prevented you from fully considering this type of loan.
The Bank Owns Your Home – FALSE. You own the home. It is just like any other mortgage where there is lien against your property. You are free to do whatever you would like with the property. Sell it, refinance it, pass it on to your heirs, etc. You are on title to the home, not the bank.
Heirs Can Not Inherit The Home – FALSE. When you pass away, your estate gains control of the property. Your estate has the option of keeping and refinancing the home or selling the home. This would be the exact same as if there was a “regular” mortgage on the home.
Social Security and Medicare Will Be Affected – FALSE. Social Security and Medicare will not be affected by a reverse mortgage. However, some programs such as Medicaid may be affected. You should consult with a financial advisor to see how a reverse mortgage may affect your eligibility to these programs.
You or Your Estate Could Owe More Than The Home is Worth – FALSE. The HECM reverse mortgage is a “non-recourse” loan which means that the lender cannot pursue you, your estate or your heirs for any losses associated with the loan.
You Have To Own Your Home Free and Clear To Qualify For A Reverse Mortgage – FALSE. If that was the case, I would not be writing to you today. Your current mortgage and any other liens against the property will need to be paid off. But you do not have to own the home outright.
You Must Be 62 In Order To Get The Loan – TRUE. At least one person must be 62 in order to qualify for a reverse mortgage. However, spouse younger than 62 can be on the title to the home. The loan is based on the youngest person’s age.
Why You Should Consider Getting A Reverse Mortgage in Oregon
There are benefits to getting a reverse mortgage. For many homeowners like you, the biggest benefit is being able to get rid of a monthly mortgage payment. Here are some other benefits to a reverse mortgage:
• Pay for in-home care services.
• Cash in hand to update, improve and repair your home.
• Access to your home’s equity through a line of credit for life’s little emergencies.
• Receive additional monthly income for life or a fixed period of time.
• Less stress over finances.
• More income to enjoy life.
• Continue to live in your home for as long as you want.
This list could go on and on and I am sure you can think of many more benefits you could receive from getting a reverse mortgage.
You have worked hard for your house. Now it’s time to let it work for you.
Why Some People Say No To A Reverse Mortgage
A reverse mortgage is not right for everyone. However, it is a great product for many senior homeowners. Here are the two most common objections heard about why some people don’t want to get a reverse mortgage.
I Worked Hard All My Life To Build Up The Equity In My Home
What you need to understand is that you now have an asset to help you during retirement. It is that equity you built up that can now allow you to potentially qualify for a reverse mortgage and no longer need to make another mortgage payment. Now may be the time to unleash the power of the equity in your home. Let your home start working for you just as hard as you worked for it.
I Won’t Have Anything To Leave My Kids
For most people, a paid off home is a huge asset they leave for their kids. Most children do not expect anything from their parent’s estate. In fact, if you were to speak with your children, which I recommend you do, most of them would support the idea of a reverse mortgage if it meant a better life for you during retirement. Keep in mind that your estate retains control of the home after you pass away, allowing your heirs to sell, refinance or purchase the home just like a traditional forward mortgage.
Request A No Cost Proposal
Getting started is easy and there is no risk on your part. Just give me, Matt Allen, MLO-254296, a call today at Pacific Residential Mortgage, 541-773-3131. With just some very basic information I can give you an idea as to how much you might qualify for.
I can answer questions you have and address any concerns. I’m also happy to speak with your family members about this program as to how it will benefit both you and them.
Again, there is no cost to speak with me about your situation, ask questions or request a proposal. Let’s see how much you may be qualified for.
I really look forward to speaking with you. 541-773-3131
Matt Allen – MLO 254296
Sr. Reverse Mortgage Banker
Pacific Residential Mortgage
1555 E McAndrews Rd Suite 301
Medford, OR 97504
Toll Free: 1-888-382-9590
NMLS 1477 / WA CL-1477