Why You Should or Should Not Get A Reverse Mortgage

reverse mortgageA reverse mortgage has had its ups and downs since they were introduced during the Reagan administration. It is a financial tool that lets older people tap the equity of their home and age in place. This type of loan can help free up cash when seniors are in retirement. And in some instances, get rid of monthly mortgage payment.

Who Can Get A Reverse Mortgage Loan?

Reverse mortgage loans are made for older people who would like to tap into the equity of their homes. When doing so, they could boost their monthly cash flow without having to worry about monthly payments. If you plan to take out a reverse mortgage, you need to be at least 62 years old. Potential borrowers should undergo a home counseling session to make sure that they understand what they are getting themselves into.

This type of loan is only for primary residences. If you are planning to take out this loan against your vacation home or investment property, then you may not qualify at all. You have to live in the house for more than six months.

Understanding The Value Of Your Home

You also need to know that you can’t borrow over 80% of the value of your home, as much as the FHA maximum of $726,525 for 2019. But the older the borrower is, the higher the loan he or she can get. Generally speaking, the percent you may qualify to borrow is your age less 12 years.

reverse mortgageThere are certain obligations you need to follow through as well. These include paying homeowner’s insurance, property taxes, home maintenance, and mortgage insurance premium. Your lender will also check whether you have enough disposable income to fulfil these obligations. In certain instances, lenders may require that the equity from the loan be set aside to cover the ongoing expenses.

Who Should Consider A Reverse Mortgage?

If you are planning to remain in your home for a very long time throughout your retirement days, and you don’t wish to pass down your home to your kids, then you are a good candidate for a reverse mortgage loan. In case you would like to preserve other investments or assets in retirement, you can get more funds through the reverse mortgage.

The best candidate for a reverse mortgage loan in Myrtle Beach is a person who has accumulated diversified and substantial retirement savings.

Who Should Avoid This Type Of Loan?

Borrowers who don’t have enough equity in their homes, a reverse mortgage in Myrtle Beach isn’t a good idea. In case you don’t have a good understanding of how this type of loan works, then you should avoid it. Also, if you plan to leave your property to your children after your death or if you plan to move out of the house eventually, then this type of loan is not for you. It’s because the balance of the reverse mortgage needs to be paid off, which can only be done by selling the house.

Call David Stacy Reverse Mortgage Specialist if you are looking for more information about reverse mortgage. We’ll help you determine if this option 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 BeachCarolina Forest, Socastee, Forestbrook, Conway, Surfside BeachLittle River, Myrtle Beach, Forestbrook