Reverse Mortgages For Seniors, How To Finance The Retirement

When you have pondered the reverse mortgages for seniors, have you thought how you would finance your retirement? Have you noticed that the reverse mortgage loans release cash for you along the schedule you have decided!

The retirement years are full of surprises. Unfortunately most of them concern the living costs, the income side staying unchanged. Towards this background it is useful to know, that the reverse mortgages for seniors are a possible source of an extra cash.

I think this is the smart thinking. The reverse mortgage loans should be an opportunity, which you can use if needed. The retirement years should be financed with the usual pensions, as most retired do.

1. If You Have Normal Reverse Loan Left.

A borrower can have only one mortgage loan type at a time. This means, that if you have a usual mortgage still left, you will pay it away with the reverse loan. This releases more cash for the monthly usage. And because the reverse loan has no monthly back payments, you will get a double benefit, both tax free.

2. The Peace Of The Mind.

The reverse mortgages for seniors offer a secure source of the money in case a senior will need it. It is like a financial insurance for the future. It is wise to get the facts about the reverse mortgages in a good time in advance and when the sudden need comes, a senior is ready. This is important, because most seniors have a situation, when the incomes do not grow, but they are afraid about the possible living cost increases in the future and how are they able to manage them.

3. You Can Use The Money From The Reverse Mortgages As You Will.

The lender, most often a bank, will follow your instructions when paying to you. There is no credit nor income information needed, because the loan is always taken against the equity of your permanent home. You do not have to report to anybody about the usage of the money.

Many seniors use it as a supplement to the normal pension, to pay the sudden medical bills, to buy a flat to a child, to travel or to pay the home repair, for instance. It is good to remember, that the money comes from the home equity, i.e. it is the money, which a senior has paid once plus the home price increases.

4. The Reverse Loan Payments Are Tax Free.

This is not a crystal clear rule, because some states in US follow the rule, that if the money is used during the same month, then it is tax free. But a senior has to talk with a counselor, if he plans to take a lump sum, it may be taxable money.

5. The Future Is Unknown, Think To Take A Credit Line.

A borrower can select, how he or she wants the lender to pay to him. The alternatives are the monthly payments, the lump sum, a credit line or a combination of all these. If a senior does not know, what are his needs he can always pick a credit line, because that is honestly flexible.

The reverse mortgages for seniors offer benefits, which are taylor made for the senior Americans. The seniors can continue to live in their old homes and to maintain the home ownerships. This is important, because the home price increases add value to the equity.

The reverse mortgages are blamed for their costs, that the upfront costs are quite high. Here I can only say, that it depends on the situation. If the home equity is the only source of the money and if the need of the money is serious, is the cost still reasonable?