Signs That a Reverse Mortgage Could Help You

reverse mortgageIf your home is your biggest asset and you need money for your everyday expenses? You might consider a reverse mortgage. But it’s not a decision to take lightly. You’ve worked hard to build up your home’s value. With a reverse mortgage, you could use a significant part of that value to cover interest and fees.

Is a Reverse Mortgage a Good Choice for You?

A Smart Solution for Long-Term Needs

To qualify for a reverse mortgage in Myrtle Beach, you should own your home or be close to paying it off. In simple terms, you must have enough home value. This way, a reverse mortgage can provide you with a monthly payment or a line of credit once your existing mortgage is paid off. It’s a good idea to get quotes from at least three mortgage lenders. Then, go through reverse mortgage counseling to determine if this loan can solve your long-term financial challenges.

You Plan to Stay Put

If you’re thinking of getting a reverse mortgage, you should plan to stay in your home for a long time. Don’t forget to consider the upfront costs. There are fees like the origination fee, which can be as much as $6,000, as well as other lender fees. You’ll also need to pay upfront mortgage insurance. It usually ranges from 0.5% to 2.5% of your home’s value, depending on your reverse mortgage plan. Don’t forget about closing costs, like a home appraisal, title insurance, and a home inspection.

If you’re planning to move in a few years, these costs might not be worth it. If you do move out, you’ll need to repay the Myrtle Beach reverse mortgage, and depending on how you spent of the loan money, this could leave you without a home.

reverse mortgageYou Can Cover Ongoing Expenses

With a reverse mortgage, you still need to pay property taxes, homeowners insurance, and home maintenance regularly. Falling behind on these payments could lead to the lender declaring your loan due and requiring repayment.

If you neglect your property taxes for too long, the government could put a lien on your home, take possession of it, and sell it to recover the owed taxes. The government’s claim supersedes the lender’s claim, meaning not paying property taxes could put your lender’s collateral at risk.

Your Spouse Is at Least 62 Years Old

To get this type of mortgage, you need to be at least 62 years old. If you’re married and your spouse is younger, a reverse mortgage might not be the best idea. While new laws protect your younger spouse from losing the home after you pass away, they won’t receive reverse mortgage funds once you’re gone. If your reverse mortgage is set up as a line of credit or monthly income, your spouse could lose access to that income.

Furthermore, the funds are based on the age of the younger spouse, regardless of whether they’re on the loan or not. The younger the spouse, the lower the borrowing amount.

You Don’t Plan to Leave Your Home as Inheritance

Some people don’t want to leave their home to anyone except their spouse. If you don’t have kids or your children are financially secure with their own homes, there’s no need to leave your house as an inheritance.

If you’ve worked hard to pay for your home and want to enjoy the equity while you’re alive, you can do so. When you pass away, the loan becomes due, and your heirs can choose to pay off the reverse mortgage balance to keep the property. However, they may not have the funds or qualifications for a regular mortgage to buy the house.

If your heirs don’t buy the house, the lender will sell it to recover the loan amount. Any remaining funds will go to your estate. If there’s a shortfall, Federal Housing Administration insurance will cover it.

If these signs apply to your situation, consider reaching out to David Stacy Reverse Mortgage Specialist to explore if a reverse mortgage is right for you.

David Stacy Reverse Mortgage Specialist
Myrtle Beach, SC 29577
(843) 491-1436

We serve all of Horry County including: North Myrtle Beach, Carolina Forest, Socastee, Forestbrook, Conway, Surfside Beach, Little River, Myrtle Beach, Forestbrook