What Is A Reverse Mortgage?
What is a reverse mortgage and is it for you? While you might have experience in other kinds of loans, this is different for several reasons. Here are the basics to a reverse mortgage, as well as ways to cut down as a senior citizen.
How To Qualify
If you are 62 years or older, you can qualify age wise for this. It is designed because most people living in the US do not have enough savings to last them the rest of their lives. Perhaps their investments went bad or they were never able to put money aside into a retirement account. With 401-Ks dissolving as an option in some businesses and this downturn in the economy, it might be the right option for someone you know. Social security income may disappear, and for now it only covers two-thirds of average living expenses, maximum. As medical and insurance bills soar with age, one’s income typically declines. So a reverse mortgage might be perfect. One must go to the bank or lender to get approved and started with the process.
How It Works
A reverse mortgage works like this. Instead of paying the lender, it pays you. You already own a home, and they basically pay for it over time. They bestow upon your household monthly payments that keep you living well, and eventually they own the home. You do nothing about interest until you leave the house for some reason. This is great for older people with need for income and a house to sell back.
There are other options if you are looking to live well in old age. Start with saving while you are young. In theory, for every 7 years that your money sits in a normal investment account, it doubles. This is the rule of sevens that economists use. So the younger you start investing, you more you will have later. Talk to a financial advisor about a 401-K or other retirement account. See if mutual funds, CDs, or high return investments fit your needs. Of course, you should pay off all debts first, and then start this. That can make it harder with school loans.
Securing equity in a home by buying and by investing in others is another good option for lasting money. Start investing in rental properties and in other sources that make sense to you.
A Utah reverse mortgage may be perfect for you. Contact our office to discuss your options.