Ronnica Rothe is a graduate with honors from the University of Oklahoma and a current student at Southeastern Baptist Theological Seminary. She works with Vision Credit Education to help individuals get out of debt and reach their financial goals.
If you are lacking funds but have a lot of money tied up in your house, you may be considering a reverse mortgage. In some situations, a reverse mortgage can be a good option. But before taking the plunge and stripping your house of equity, you will want to find out more about this product and its advantages and disadvantages.
A reverse mortgage allows for the owner of a house to continue living in the house, while gaining cash from the equity of the house. If you take out a reverse mortgage on your home, you receive tax-free monthly checks as if the bank was buying back the house from you.
Reverse mortgages are not for everyone. They often require you to stay in the house, which will not allow you to move if you wanted to. Also, you will want to make sure that you time your reverse mortgage correctly and not outlive the monthly payments, because if you do, you won’t even have the equity of your house to fall back on. That is why you must be at least 60 or 62 years of age to do a reverse mortgage.
You may be required to receive reverse mortgage counseling from a qualified HUD-certified counselor before you go through with it. Regardless of whether or not it is required, you would benefit from meeting with a third-party that can show you the benefits and downsides of such a process. This type of counseling can sometimes be done over the phone.
Talking to a reverse mortgage housing counselor is probably your best option to finding out more information about a reverse mortgage.
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