A reverse mortgage is a loan product for seniors that lets you borrow against the equity in your home. You can receive the funds from a reverse mortgage as a lump sum, in installments, or as a line of credit, and spend them however you want.
Like any lending product, a reverse mortgage is ideal for some borrowers, and not others. How do you know if a reverse mortgage is right for you?
- You meet the basic requirements. First of all, you can only get a reverse mortgage if you meet the basic requirements:
- At least one borrower age 62 or above
- 50% or more equity in your home
- You want to borrow against your primary residence
- You are current on all home maintenance payments
- You can pass an assessment of your credit score, income and tax records
If you meet these requirements, great. Now let’s go over what else you should consider.
- You plan to stay in your home. You can stay in your home for the rest of your life without the reverse mortgage coming due (the death of the last borrower will cause it to come due). If you sell your home though, then the reverse mortgage will come due. So, a reverse mortgage is best for homeowners who plan to stay in their homes a very long time, or for the rest of their lives.
- You have discussed the reverse mortgage with your heirs. After the death of the last borrower, the loan will be due. The responsibility to pay it will fall on your heirs. They can either pay it and keep the home, or sell the home to pay off the loan (if it sells for less than the full amount of the loan, they do not have to repay the rest). Before taking out a reverse mortgage, it is important to discuss this with your heirs. Ultimately, you need to do what is right for you, but you should consider their wishes and communicate clearly about what to expect.
- You want to increase your quality of life with a flexible loan. If you could use more liquidity in your finances, and you want full control of how you spend your funds, then a reverse mortgage can be an ideal choice. It is completely up to you whether you save the money, invest it, or spend it. You can use the reverse mortgage funds for any purpose, whether you want to make improvements to your home, pay off debts, go on a vacation, or do something else entirely.
Apply for a Reverse Mortgage in Ohio
If you believe a reverse mortgage may be right for you, please give us a call at (614) 505-0620 to schedule your consultation. We can check if you are eligible, and help you figure out if a reverse mortgage is a good fit for your financial needs and future plans. We work with senior borrowers in Columbus and throughout OH.
