Retirement is more enjoyable when you have enough money to do the things you enjoy. Unfortunately, many retirees are unable to travel and enjoy their final years because they don’t have enough income. A reverse mortgage can provide the cash flow older adults need to ensure their bills are paid and have some money left over to have fun. While a reverse mortgage in Newport News can help seniors stabilize their income, there are a few things everyone should know about this unique kind of loan before deciding to get one.
In order to qualify for a reverse mortgage, the youngest applicant must be at least 62-years-old and either own their home free and clear or have a very small mortgage that can be paid off with the proceeds of the reverse mortgage. The applicants must live in the property but it can be up to a four-family residence, a manufactured home or an approved condominium. There are no income or credit restrictions on reverse mortgages.
After the reverse mortgage has been approved by lender, homeowners receive payments from their lender. The proceeds can be used in any manner so whether a senior needs the money for living expenses, home repairs or a dream vacation, they do not have to answer to anyone. Many seniors structure their reverse mortgage payments so they get a monthly check but lump sum payments are also an option. With a lump sum, seniors can make upgrades to their home so they can age in place or purchase a recreational vehicle and go on a road trip.
Unlike home equity loans, a reverse mortgage in Newport News does not need to be repaid as long as the borrower is living in the home. If the borrower moves out of the home or dies, the principal balance and interest on the loan becomes due. In some cases, the borrower’s heirs pay off the loan with life insurance proceeds. Another option is to sell the home and pay the balance. Because the lender does not own the home, the heirs are free to keep or sell it after the loan is repaid.
