More People Looking into Reverse Mortgages: What is a Reverse Mortgage and Why and When are They a Benefit?
Posted by Laura Nelson on January 18, 2010
Steve Thoren, Certified Senior Advisor, First Choice Bank
A reverse mortgage enables homeowners 62 years of age or older to tap into the equity of their home and receive a tax-free source of cash. With a reverse mortgage, you don’t make monthly payments, you receive them.
This special type of home equity loan is not due or payable as long as you occupy your home as your primary residence. Simply stated, you get the equity in your home returned to you to use as you need it. The amount of money you can receive is based upon your age and the value of your home. There are no restrictions on what you use the money for because it’s already yours.
The most common need for a Reverse Mortgage is to offset monthly expenses so you will be able to remain living in your home and continue life as you know it: independent! It is often used to offset caregiver expenses or to pay off an existing mortgage so as to eliminate that monthly bill. Additionally, it can be used to enhance your life by allowing you to afford to travel; or maybe even help kids or grandkid with expenses like college.
With a reverse mortgage, you can choose to either receive monthly checks or a lump sum at closing for you to manage, or a combination of both. All you are responsible for is paying your annual real-estate taxes and home owner insurance. The interest rate is very low and is only imposed on the amount you have taken out.
A reverse mortgage is not for everyone. For instance, if you have plenty of money saved or your income is greater then your living expenses, you do not need a reverse mortgage. However, if for instance your spouse passes away and subsequently his pension goes away, you may find yourself tapping into savings every month. In this case a reverse mortgage might be the option of choice to assist you with being able to “age in place”. There are many scenarios where a reverse mortgage can help you stay in your own home.
Steve Thoren, a Certified Senior Advisor (CSA), is a Reverse Mortgage Specialist with First Choice Bank. Steve is available to meet with you and your family to discuss whether this is an option that fits your situation. If you or someone you know might benefit from meeting Steve, pass along his contact information.
Reach Steve Thoren at (630) 845-0500 (office) and (847) 840-7319 (mobile) or via email at SThoren@firstchoicebanks.com. First Choice Bank is located at 330 S. Naperville Rd., Wheaton, and 1900 W. State St., Geneva. www.firstchoicebank.com.
Tags:Money
