Reverse Mortgage Loans FAQ: “Should I Get a Reverse If Mortgage I’m Moving…(Eventually)?
A reverse mortgage loan or a home equity conversion mortgage, is a mortgage that pays you based on your age, home equity and is contingent on whether or not you live in your primary residence.
Some homeowners, however, question their decision to get a reverse mortgage loan, especially if they have plans to move in the near future. It’s a valid question considering the loan will become due and payable if they are no longer live in their primary residence, for whatever reason, because the amount a borrower can potentially receive is also dependent on the amount of home equity they have accumulated through the years.
So the question remains: “Should I Get a Reverse Mortgage loan If I’m Moving…(Eventually)?
Well, various factors come into play when you are considering a reverse mortgage loan even if you’re going to move. Most importantly: how long are you going to live in your house before you move?
Whether it’d be to a new state, retirement community, or another house in a different neighborhood, if it’s in the future, it may be important to consider your present options first before considering the future. However, if you’re moving in three months, a reverse mortgage loan may not be the best option for you. In short, if moving is a future plan, many years off, it’s crucial to research other options that may be available to you.
If this is the case, then the question is, will you have enough cash flow, for the time being, to sustain your current lifestyle?
It’s not always easy to keep up with your financial obligations on a fixed income, especially with the rising cost of lives and depleting government benefits. Not to mention, the potential dangers of reverse dollar cost averaging.
If you can sustain your lifestyle, the question remains, will you have enough in the future to sustain your lifestyle when you move?
When a reverse mortgage loan becomes due and payable, the primary residence can be sold and the proceeds will be used to pay off the loan, plus closing costs and any interest that has accrued over the life of the loan. Any difference is given to the homeowner and/or heirs.
If your home equity is substantial enough, you may be able to receive a considerable cash flow boost even after repaying your reverse mortgage loan.
In truth, just because you’re moving, doesn’t mean a reverse mortgage loan isn’t potentially beneficial. There are many factors to consider even if you are planning on moving in the future.
The new, consolidated program can be just as beneficial as a retirement tool as it as been it the past. It’s time to consider your retirement, your income and how you want to spend the next stage in your life.
Retirement isn’t the end, it’s only the beginning. A reverse mortgage loan can help you make the best of it.
Be aware that while you cannot lose your home under normal circumstances, foreclosure may occur if you do not pay your taxes and insurance and otherwise comply with the loan terms
At PS Financial Services, an independent reverse mortgage broker in Florida, we offer all the reverse mortgage options available for a retiring or retired senior homeowner. Give us a call at (888) 845-6630 or send us an email at info@PSReverseMortgage.com. We do not pressure those who inquire, we are simply here to help.