How Seniors Can Benefit From Reverse Mortgages
Reverse mortgages in Las Vegas are becoming an increasingly popular tool for people entering the golden phase of their lives. These secured and dependable loans can reduce fixed costs for a retiree as well as provide a second source of income all while eliminating concern over where the retiree will live, how they will afford to pay for that home and so forth.
Reverse mortgages sometimes get a bad rap, but there are protections in place. Before you sign off on a reverse mortgage loan, you must receive counseling from an independent HECM counselor. The cost of this counseling is paid for by the lender, not the borrower. According to the National Reverse Mortgage Lenders, the counseling follows strict HUD guidelines and covers topics such as income, fixed costs, budgeting, alternative loan options and so on.
Lower Fixed Costs
Reverse mortgages are available to people 62 and over. Since such people are generally on a fixed income, increasing income generally requires reducing fixed costs. The beauty of a reverse mortgage is that if the retired person is still paying their mortgage, the loan is assumed by the lender.
Increased Cash Flow
Another advantage of a reverse mortgage is that it can provide a source of income in addition to social security, a pension payment and so forth. The lender pays the borrower. These loans may include a lump sum, but they generally involve a monthly payment made by the lender to the borrower. But be mindful that this money does not have to be repaid in a traditional sense. It is secured by the house.
Value Can Increase Over Time
An oft-misunderstood aspect of reverse mortgages is that the line of credit can increase in value every year. This is a particularly important factor for those who use the credit as retirement savings protection but don’t necessarily need to draw on that credit on a regular basis.