Retiring Wise Blog
Have a Mortgage Or Own Your Home Free and Clear? You Still Can Qualify For a Reverse Mortgage02/20/13 / Reverse Mortgage Information / Written By: Kristen Curzytek
There is a huge misconception about reverse mortgages that just is not true! Many people think you can only qualify for a reverse mortgage if your home is paid off. And that is simple just not true. In fact one of the main reasons many people get a reverse mortgage is to pay off their current mortgage. It helps free up income that would normally go to a mortgage. Here is a simple break down of who a reverse mortgage is designed for.
For people who have a mortgage on their home
As I mentioned already reverse mortgages can certainly be obtained by people who currently have a mortgage on their home. Here’s what will happen. Qualify for a reverse mortgage. Currently you must be at 62 years old or older, a home owner and have sufficient equity in your home. Once you complete the easy 4 step process you will receive your proceeds. You will get a percentage of your home’s equity based on your age and the value of your home. Your first mortgage will be paid off with those proceeds. If there is any proceeds left from paying off your mortgage you will receive the rest of the equity in tax-free money. You can use that tax-free money any way you would like.
How it benefits people who have a mortgage…..
People who have a mortgage and receive a reverse mortgage no longer have to worry about making that monthly mortgage payment. No longer having to make a monthly mortgage payment can free up some cash for things you normally could not do. It can improve the quality of your life.
For people own their home free and clear of a mortgage
If you own your home outright you will be able to access a larger amount of cash then someone who has a mortgage. Here’s what will happen if you own your home free and clear. Qualify for a reverse mortgage. Remember you must be at least 62 years old or older, a home owner and have sufficient equity in your home; the equity part won’t be a problem since you own your home free and clear. You will receive your proceeds in tax-free cash which you can use for anything you want.
How it benefits people who own their home free and clear….
For those who own their home free and clear may wonder….why should I get a reverse mortgage? A reverse mortgage can give those who own their home free and clear the ability to tap into a source of equity they may have never considered. You can also start doing things in your retirement you never thought you would be able to afford.
So whether you have a mortgage or own your home free and clear, a reverse mortgage can provide money for things you never considered doing in your retirement. It really can be a life changing experience.
Kristen Curzytek is a writer for Retiring Wise. Give us a call at (800)401-8114 to talk to one of our licensed professionals. They can discuss your financial situation with you and determine if a reverse mortgage makes sense for you and your financial goals.