DC Fawcett Real Estate
Though house flipping is rewarded at the end of the day. It may take a lot of time to get money from that. DC Fawcett had analyzed the market must face healthy competition. Every buyer looks at the price, surroundings, and their convenience before buying the house.
However, if your house is mortgaged & you need funds, a reverse mortgage is one of the options.
What is a reverse mortgage?
A reverse mortgage is a loan that enables the people who are above 60 to avail of the loan into equity without selling their house. It is helpful for the senior citizens to stay in their homes while getting their retirement income. The loan has to be repaid after the borrower relocates to another place or passes away.
How does reverse mortgage work?
If a homeowner has no income or limited income and is not able to cover their expenses, the reverse mortgage is the last resort. In this type of mortgage, you need not repay the mortgage loan and interest fully.
Read also – Foreclosure Overview – By DC Fawcett
Reverse mortgages – pros and cons
The Reverse mortgage has been beneficial to many homeowners as it is one of the best ways to improve their financial status at the time of retirement. Nothing is ideal in this world. Everything has got plusses and minuses. The reverse mortgage is not an exception. Below are its pros and cons.
The reason why the reverse mortgage is advantageous is because of the exemption for the traditional mortgage payments utilizes your home equity. The other benefits are
This is a very flexible option. which can be used in many ways for different types of borrowers. If you need financing, you can go for this product. If you have sufficient resources, it can also be used as a financial planning tool.
It allows you to stay in your home as long as you want without any monthly mortgage payment. You can use home equity fund for all the purposes.
Fewer chances of default
In reverse mortgage cases, your house cannot be taken away from you on the grounds for nonpayment like it is done in home equity unless you leave your house permanently. That is the time you need to pay the insurance and taxes.
The reverse mortgage is free from all the taxes whether you receive it as a fixed an income or in a lump sum.
Reverse Mortgage Disadvantages
As there is no need to make monthly mortgage payments, the interests keep accumulating every month which has to be paid back when you move out of the property. It is only suitable for those who want to stay in their house and improve their standard of living.
Limited access to home equity
If you have a lot of home equity, you can only use a certain percentage of it which becomes very much frustrating.
There are many advantages and disadvantages in the reverse mortgage. However, beyond all the pros and cons, the reverse mortgage is not suitable for everyone.