After your reverse mortgage is complete, there are many different ways you can elect to receive your proceeds. Since different retirees have different income needs, the friendly consultants at ShopReverseMortgages.com can help you in creating a customized solution to meet your income needs based on the funds you will receive if you choose to move forward with a reverse mortgage:
Keep controlling what happens to your home and continue to owning it is one of the clearest benefits of a reverse mortgage. No one wants to feel like someone else owns their home. This is one of the best benefits of a reverse mortgage.
Every advantage of being a homeowner will remain with you. This does include paying your homeowners insurance & property taxes. Did you know you can still sell your home at any time? You are entitled to keep all equity after the reverse mortgage loan is repaid.
As long as you live in your home, there is no repayment schedule. That is right. No repayment schedule as long as you live in your home. Reverse mortgages are known for allowing a house rich cash poor retiree to safely turn the home equity into either a monthly cash stream or one-time lump sum payment.
It is important to note you are still responsible for homeowners insurance, utilities (such as cable, internet, electricity, etc), as well as property taxes.
With a reverse mortgage, you can pay a portion or pay the entire reverse mortgage balance without any pre-payment penalty. This is great because if you ever elect to sell your home, any equity in addition to the reverse mortgage balance is 100% yours.
The funds earned from a reverse mortgage are typically tax-free as long as you live in your home. This is due to the fact that your reverse mortgage proceeds are coming from home equity. Not earned income. This is a distinct advantage of a reverse mortgage. However, we always advise our clients to consult with a tax adviser for specific information.
Similar to the benefit above, a reverse mortgage allows you to tap into your home equity for a lump sum of cash or monthly payments. For this reason it is not earned income and should not effect any entitlement programs such as Social Security or Medicare. Once again, seek a tax adviser for specific information pertaining to entitlement programs.
Reverse mortgages are a government-insured fiancial means to help retirees unlock home equity without having to move from their home, retain home ownership benefits, etc.
If you are concerned about the solvency of the bank who will provide you the equity, it is important to note that the Federal Government fully backs the reverse mortgage program and guarantees all scheduled payments will be received.