A reverse mortgage is a special type of home loan for homeowners 62 years or older that requires no monthly mortgage payments. While borrowers re still responsible for property taxes and homeowner’s insurance, reverse mortgages allow elders to access the equity they have built up in their homes and defer payment of the home loan until they die, sell, or move out of the home. Since there are nopayments on a reverse mortgage, the interest is added to the loan balance each month. The rising balance can eventually exceed the value of the home, especially in times of declining home values of if the borrower lives in the home for many years. The upside to this is that the borrower is usually not required to pay any loan balance in excess of the value of the home. Reverse mortgages generate varying opinions. Some economists feel that they allow the elderly to supplement their income while regulatory authorities argue that reverse mortgages are complex, difficult to understand, and open the doors to fraud and other scams. Because of these potential problems, it is widely suggested that people seek assistance when considering this process, and one of the best ways to shop reverse mortgages is Florida is by going to www.shopreversemortgages.com/florida/.
The Details
A reverse mortgage can provide income to pay off your original mortgage, supplement your income, or pay for important things like healthcare expenses. Instead of paying the mortgage company, they pay you as the equity on your home is turned into cash. The money that is received is usually tax-free which should not affect Social Security or Medicare benefits and does not have to be paid back as long as you live in your home. While a reverse mortgage can be very beneficial, it is critical to understand the costs and responsibilities that come with it to make sure it does not turn into a financial nightmare. The fees and closing costs are higher than those with a traditional mortgage, you will owe more over time as the interest builds up (variable interest rates can make this an even more expensive consideration), the interest is not tax-deductible, and other costs toward the home must be paid such as property taxes, insurance, utilities, maintenance, and major repairs.
Navigating the Waters
A reverse mortgage is a complicated process, as is determining whether or not taking one out is financially feasible. It is highly recommended that you seek assistance while making this decision, and reverse mortgage companies in Florida are happy to help you make this decision. ShopReverseMortgages.com sets itself apart as their business model was built around helping customer find the best options when it comes to a reverse mortgage. Dealing with one bank is a thing of the past as this company has a large network of banks that compete for business which in turn means lower rates and costs for customers. This business also makes a firm point to share all of the pros and cons of a reverse mortgage with customers to deliver not just great service, but to maintain its ethical standards. In fact, customers have 72 hours after a reverse mortgage to change their minds, a benefit greatly appreciated by Florida residents.
ShopReverseMortgages.com also strives to provide peace of mind for their customers by making it very clear that the federal government also insures reverse mortgages under the FHA. Once the mortgage is closed, homeowners can elect one large lump sum from their equity, choose to receive monthly payments, or use the funds as a line of credit. This company is also an informative organization therefore prepared to discuss all of the pros, cone, and counseling/advising requirements necessary to begin the application process. If at any time a customer does not want to move forward with the loan process, they are told they are under no obligation to proceed. It’s all about providing as much information as possible so people can make a fully informed decision and shopping around dozens of banks, lenders, and brokers is another way ShopReversemortgages.com helps their customer make good decisions. By getting several different offers, customers have options to choose from to make sure they get the best deal possible.
So for those who are “house rich but cash poor” a reverse mortgage might be a smart investment. A financial counselor will review all of the monetary details with you to make sure the process is completely clear. This person can also help you set up a financial plan for paying property taxes on time, keeping up with the homeowner’s insurance, maintaining the home, and emphasizing that the home must be the customer’s principal residence. After this initial counseling, customers can decide whether or not they want to proceed with a reverse mortgage. If so, ShopReverseMortgages.com is the perfect next step.
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