What is a Reverse Mortgage?
At Quality of Life Mortgage, our most common question is what exactly is a reverse mortgage? We have helped many people in the Phoenix area, including Scottsdale and Sun City, in educating themselves on what exactly a reverse mortgage is. This page will help you understand the basics of a reverse mortgage.
A reverse mortgage works just like it sounds. Where in a traditional forward mortgage that someone would use to purchase a home and then make monthly payments to a lender, with a reverse mortgage it is the opposite. The lender will pay you as the homeowner.
First you have to be at least 62 years of age and be living in the home that will be used for the reverse mortgage. Over the years as you own your home you build up equity on it, this is where a reverse mortgage gets the money. It will take the equity and give you consistent monthly tax free cash payments. This way you will no longer have to worry about making mortgage payments, and will have that added income each month.
When you have a reverse mortgage you never have to make any payments unless the home is sold or vacated. The only payment that is required with a reverse mortgage is for the home owner to be current on both their property taxes and home insurance.
The reverse mortgage program was created to help people who have retired or are about to retire and are home owners, a way to be able to get extra money. As people retire they no longer will have the incomes they would have when they worked. Even people who thought they have done a good job in saving for their retirement, there are still unexpected events that can change even the best planned retirements. For example it is impossible to predict health, you might get ill and the medical costs with treatment can get very high very quick.
It is important to remember that with a reverse mortgage there are no restrictions on what you can use the funds for. It just doesn’t have to be for things like medical bills, it can be used for a dream vacation or just to have some extra spending cash.
To get more details or speak to us about any specific questions or concerns you have on what exactly a reverse mortgage is simply contact us.
