There are a lot of factors to consider before you apply for a reverse mortgage.
Is now the best time to tap into your home equity or should you wait?
What factors affect that decision are varied and the answer is just as varied. After over 10 years of specializing in Reverse Mortgages, Becky Smith will provide her knowledge and expertise to work with you, your family and/or financial advisors to help determine if a Reverse Mortgage is right for you.
Are you on a fixed income with no other assets?
If you don’t have much income, a reverse mortgage might not be the best option for you. If you take out a reverse mortgage loan and then have trouble paying your property taxes and homeowner’s insurance, you could face foreclosure. Another option might be to downsize. If you sell your home and use money from the sale to buy a more affordable one, you could be more financially secure in the long run.
Do you have children or other heirs to whom you plan to leave your home?
Taking out a reverse mortgage can jeopardize your ability to leave your home to your heirs. If this is a priority for you, think twice about a reverse mortgage.
How long do you and your family plan to live in the home?
Reverse mortgages can have high upfront costs. If you sell your house within a few years, you won’t have gotten as much benefit from those costs than if you had stayed in your home for a longer time. However, with recent changes implemented both by HUD and the mortgage marketplace, costs have been reduced and it is actually possible in some cases to have a NO COST Reverse Mortgage loan.
How much will it cost you in fees to obtain a reverse mortgage?
Fees vary. Depending on the type of reverse mortgage, the percentage of the money available to you that you take, the interest rate/margin and even which lender you choose, can affect the cost, so it is important to shop around for the best deal. Becky Smith will assist in determining if you are getting the lowest cost option available to you. She will provide a no-obligation quote and comparison to make sure you are getting the best deal. Even if you are working with someone else!
How will you pay for property taxes and homeowner’s insurance?
It’s important to have a plan for how you will pay for property taxes and homeowner’s insurance. If you fall behind on either one, the lender could foreclose on your reverse mortgage and you could be forced to move.
Does your spouse or partner want to keep living in the house if you die?
Discuss this question carefully with your partner. If you take out a reverse mortgage without your partner as a co-borrower, then your partner will have to move out or repay the loan if you die. If your partner is a co-borrower, both you and your partner will be able to keep living in the house after one of you dies.
It’s usually a good idea to discuss important financial decisions with friends, family or someone you trust. Becky Smith will meet with you and/or a family member, friend or trusted advisor in your home or can conduct a conference call with all parties.
Becky Smith believes that it is important that you have all of the information you need to help determine if a Reverse Mortgage is right for you.