As with many loans there is a cancellation option after signing the papers for a reverse mortgage. Cancellation must occur within three business days of the mortgage closing. Cancellations must be in writing (a form is provided by your lender) and must be filed before the end of business closing on the third business day after closing the original mortgage. Loans can only be cancelled in writing and not by telephone or via a verbal confirmation.
One reason some of the mature American population chooses a reverse mortgage is to obtain money for long-term care. Long-term care is expensive and can cause undue stress to your and your family. A reverse mortgage will help alleviate some of this burden. A reverse mortgage will assist you with the costs associated with medical care, without increasing your living expenses or debt to income ratio.
The longer you have owned your home, the more equity that you have built. If you are not choosing to move, then using the equity in your home can be put toward your care. However, you may not know how much equity is available to you or that this type of loan even exists.
One factor of long-term care may involve modifying your home to fit any special needs you may have as you age. Using the equity obtained through a reverse mortgage can also help with the costly undertakings of modifying a home to fit special conditions, such as building a wheel chair ramp. This is beneficial to you as the homeowner, and also helps address areas of your home that may now be less safe to you.
As the cost of care becomes more of a concern for the aging population, it is important to utilize those resources, available to you, through the existing equity in your home.
As you investigate the possibility of a reverse mortgage, you may wonder about your heirs should you pass before the loan is due. It may be an uncomfortable topic to think about, but is important nonetheless. You may wonder whether or not to include them in the planning process. It is important to consider your current situation to decide who will be involved in the planning of your reverse mortgage.
It is important to understand that with a reverse mortgage you are using the equity in your home for many possible reasons, like long term care or debt consolidation. By using the equity in your home, less equity is available as inheritance. If you decide not to communicate this to your heirs, you should consider including this information in your will.
If you should pass prior to the repayment of the loan, your estate will be used to cover the repayment of the loan. This will include the loan and any interest or other fees associated with the loan. It is important to note that the outstanding debt will not pass to your heirs and that any left over equity will pass to your heirs.
