Take Advantage of a Reverse Mortgage
If you are a senior citizen in need of cash for medical or home improvement reasons, you may want to learn more about reverse mortgages. Otherwise known as the Home Equity Conversion Mortgage or HECM, this program from the FHA allows you to withdraw equity on your home.
Engineered to assist seniors in need of more financial security, it's a very safe way to supplement retirement funds when an emergency arises. Essentially, when you pay off the mortgage on your home, the part that is already paid off belongs to you and is your equity. You may be able to take out a loan on this paid-up portion.
The difference between this and an ordinary mortgage is that the borrower need not pay back this loan until the principal loan is fully paid or a mortgage payment is missed. Neither do you have to have a certain income in order to get the loan. But can everyone qualify for such a program?
Not surprisingly, there are some requirements that must be met when applying for a loan like this. The borrower must be a senior citizen, meaning 62 years old or more, must own his home or have a mortgage balance that could be paid off with the amount borrowed on the reverse loan, and be a resident in the home.
Furthermore, the home should be a single family home or if a multi-unit complex should have a maximum of four units with one unit being lived in by the borrower. Those that are owners of condominium units or manufactured homes must meet the requirements set by the FHA in order to avail of the reverse mortgage.
To make a long story short, the higher your age, the higher the appraised value given to your home, and the lower the current interest rate, the more money you may withdraw on your home equity. It's a great way to make your assets pay for you.