Is a reverse mortgage right for you? Most people know that such a mortgage allows them to get cash from their home, but beyond that it’s a mystery. What’s the purpose of a reverse mortgage? More importantly, how do you apply for one if you know that your family could benefit from it? Our mortgage broker team is here to help. Below are the most important factors to consider when applying for a reverse mortgage, and what you must take into consideration as you decide whether it’s right for you.
Why would you need a reverse mortgage?
Do you have debts you’re tired of paying? What about a vacation that you’ve always wanted to take, but you’ve never had the cash to take it? Perhaps you want to remodel your home or add an extra addition. Getting approved for a reverse mortgage can give you the cash you need to pay for these things thanks to the equity on your home. By advancing you on a certain amount on your equity and locking you into an interest rate, your reverse mortgage will cause your mortgage to increase; if your home value doesn’t change, your equity also decreases. A reverse mortgage can be tricky, and that’s why it’s important to…
Consult with your lender
Using a reverse mortgage to convert your home’s equity into cold hard cash sounds like it should be the best decision in the world for homeowners, but in some cases it’s not. Consulting with a lender can help you realize whether or not you are making the right decision. One of the biggest things borrowers have to consider is that interest can quickly accumulate on the amount you are borrowing. Since this is applied to your main mortgage, you could be seeing thousands being added to your mortgage in a mere few months; contrasted to the equity borrowed, it may not be worth it for some homeowners. If you have a lot of wealth built up over the years and you want to use the extra money strategically and wisely, it may not be an idea.