How Seniors Benefit From The Reverse Mortgage Loans
When seniors think of the reverse mortgage loans
, the main issues are not the loans, but the needs, which seniors have. The needs should dictate, how seniors will organize their financial situations and whether these loans fit to these plans and if yes, for which purposes they will be used.
1. You Can Decide, How The Lender Will Pay You.
The targets of these loans are to offer help to seniors in financial issues. The money for these needs comes from the equities of their own homes, so it is their money. Seniors can decide, whether they want the money paid as lump sums, as monthly payments, as credit lines or even as combinations of all these.
For instance, if the need is to buy a home for a child, to make a home repair and to get cash for the increased medical bills, a senior can take a part of the loan as a lump sum and a part as monthly payments. If he has no specific idea of the needs, but he is sure he needs the money, he can take a part as a credit line.
2. Seniors Can Use The Reverse Mortgage Loans To Buy New Homes.
When the children have moved away and the homes feel too big, seniors can use the reverse mortgage loans for downsizing their homes. They can buy new smaller homes. In January 2009 a new rule came effective, which orders that the appraised value is used as a bases for the loan and not the sales price.
3. Reverse Mortgage Loans Are Tax Free.
The tax free income is always nice to get, especially when you are a senior and in the need of the cash money. Everything, what the lender will pay you, all incomes, are tax free. This is one of the nicest benefits, which the reverse mortgage loans offer. The reason is natural. You have paid the taxes, when you earned the money to pay your mortgage.
4. A Senior Will Never Owe More Than The Value Of His Home.
This is a very important fact, a kind of a safe factor. The system takes care that the other assets of the borrower will never be used to pay for the reverse mortgage loan. This also means, that if the borrower has no other assets, he can still get the reverse mortgage loan. And the borrower can never owe more than the value of the equity of his home.
In many cases the reverse mortgage loans are not the best options. This is the reason, for instance, why it is very important to go and meet the reverse mortgage counselor. He is an expert and can tell, what is a healthy alternative for your special needs.
by: Juhani Tontti
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