Researching mortgages when purchasing a home is challenging due to the number of rules that vary between types of loans. There is one mortgage, however, that stands out against the others in that the borrower is actually the one receiving payments. This is called a reverse mortgage, and it caters to older homeowners looking to supplement their income and plan for retirement.
Those who own a home, and are aged 62 or older, are eligible to apply for a reverse mortgage from a lender like Sun West Mortgage. When applying, the lender will confirm that you are able to financially maintain the home and utilities and will continue to make tax and insurance payments. Once approved, the money can be used however you see fit, and the loan does not need to be repaid until you pass away or sell the home, at which time the estate or sale of your home will pay the loan back.
For many planning for retirement, in need of cash due to financial hardship, or looking to make improvements to the home, a reverse mortgage may be the best course of action. Remember that the loan is drawing on the equity in your home, leaving less to be distributed to your spouse or heirs once you pass away. However, this money is tax-free and can be received in monthly payments, in a lump sum, or a line of credit. Ensure you have a full understanding of the benefits and challenges of a reverse mortgage before applying.