What is a reverse mortgage?
This is one of the most common questions homeowners have, because they don’t know the difference between a reverse mortgage and a traditional mortgage. This type of mortgage allows you to get access to 50 percent of your home’s current appraisal value. The difference in this and a traditional mortgage is that you don’t have to pay payments; payments are actually paid to you.
What are the options for getting the money?
There are a few different ways that you can get your reverse mortgage payments. You can get the payments in a lump sum, in monthly payments, in a line of credit, or even some combination of them all.
Are you taxed on this money?
You do not have to pay taxes on the money from a reverse mortgage. This is great news as the money being tax-free stops it from interfering with government payments such as social security and Medicare. You may have a few problems if you have Medicaid however.
Does the lender own your home?
No, you still own your home free and clear. You and your spouse own the home, and do not have to pay the money back, unless you decide to sell the home and move.
How do you qualify for a reverse mortgage?
First, the home must be your primary residence. Second, you and your spouse must be 55 years of age or older. No existing charges and debts can go over the 50 percent that you can receive for your home.
Is there a limit on what you can do with the money?
Anything you want is the surprising answer to this often-asked question. It’s your money, so you can spend it any way you want. Many people go on vacation; some use the money to make improvements on their home, and many more just save the money for a rainy day. What you do with it is up to you, and you can be sure that you will enjoy every second of what you decide.
Now that you know a little bit about reverse mortgages, you can make an informed decision about what you want to do with the rest of your life.
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