Since 1989 when Marjorie Mason of Fairway, Kansas took out the very first one, reverse mortgages have been steadily increasing in popularity. A recent study showed that over 900,000 homeowners have taken advantage of the benefits of reverse mortgages. Available to homeowners 62 and older, these provide a great opportunity to cash out some of your home’s equity. The real benefit is that you don’t need to make monthly payments, and you don’t need to meet the income and credit requirements usually found with traditional mortgages. There are some important choices to make during the process, so a little research can help you find the best reverse mortgages.
Three Types of Reverse Mortgages
The most common reverse mortgage allows you to cash out a portion of your home’s equity. You get this amount in a lump sum, and you can usually spend it however you wish. This is a good option for paying down your other debts or putting the money to work in other ways.
There is also the option to receive your proceeds in the form of a monthly payment. This is one of the best reverse mortgages if you’re looking to replace an income source or have very few other debts.
The third option functions similar to a line of credit. You only draw money on the mortgage as you actually need it. This is a good choice if you have some big expenses on the horizon, or you’re working to complete construction projects around the house.
The Benefits of Not Having Payments
Regardless of which reverse mortgage best suits your needs, you’ll find several things in common among them: the amount you can borrow is determined largely by the amount of equity you have in your home, not your personal income or credit. Also, the best reverse mortgages let your home’s equity do all the heavy lifting, while you enjoy spending or investing that money without having to worry about making payments.
Longbridge Financial, LLC can help you choose the best reverse mortgage options for your current situation. Contact them today!