Homeowners who are retired or are considering retirement may wish to increase their monthly income. Seniors who live on a fixed income may be concerned that their retirement savings and Social Security income may not be enough to keep up with the rate of inflation. Catastrophes and other unexpected events create unexpected expenses. Read our Top 10 Things to Know About Reverse Mortgages to learn more. Most likely, your home is your biggest investment. You can use your home to generate income after your retirement by taking out a reverse mortgage on your home. Contact one of our reverse mortgage experts or fill out the form below to find out if a reverse mortgage is right for you. Check out some of the benefits of a reverse mortgage in Florida.
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A reverse mortgage may be the solution to financial difficulties if you are a senior citizen and you owe nothing, or close to nothing, on your home. You can use the equity in your home to borrow money from a lender and you don't have to make any payments until the home is sold.
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As long as a borrower lives in his or her home, HUD does not require repayment of the money borrowed through a reverse mortgage. If the homeowner sells the home or is deceased, the lender will recover the loan and the interest at the time the home is sold. Any additional value acquired from the sale of the home would be passed onto the surviving legal recipients. If you take out a reverse mortgage, HUD requires you to have mortgage insurance. If proceeds from the sale of the home are less than what the homeowner owes for the reverse mortgage loan, then HUD will pay the remaining balance of the loan, which is covered by the mortgage insurance.
There is no minimum income or amount of assets required to qualify for a reverse mortgage. As long as you own a home and are of qualifying age, you can receive a HUD reverse mortgage. If you owe money on your home mortgage, you must pay off this debt with money from the reverse mortgage. A reverse mortgage must be the first and primary lien on the property. Like a traditional mortgage, there are closing costs and financing fees associated with a reverse mortgage. You may finance these costs into the mortgage loan.
Reverse mortgage lenders may require repayment if you do not pay your property taxes, keep the home in good repair, have homeowner's insurance on the property or if you rent out part of your home, add a new owner to the title of the property, the zoning of your home changes or you take out any new debt in which the home serves as collateral. Also, the mortgage lender may consider you in default if you abandon your home, declare bankruptcy, the home is condemned or the government acquires your home for public use. You can learn more about reverse mortgages from AARP.
The Department of Housing and Urban Development is another good source of information. HUD can provide you with the information necessary to determine if a reverse mortgage is right for you.
Before you decide to take out a reverse mortgage, you should know about the different types of reverse mortgages offered: