If you are a senior and experience trouble living on your fixed income then you may wish to look at using a reverse mortgage to help with the ever rising cost of living. If you are like almost all people living on a fixed income because the prices of food and gas are making it progressively difficult to enjoy the life style you projected for during your retirement. Many are considering obtaining a part time job to help with cost only this can suffer a negative affect on your social security income and your tax returns as you may wind up owing taxes at the end of the year.
With reverse mortgages however you can get access to additional money and it will not negatively affect your current financial situation. This type of mortgage is easy to qualify for and can help get you back to living in the style you had hoped for. Many consumers wonder what the difference between a reverse mortgage or a home equity loan is here is how each works:
• Reverse mortgages, plainly put, permit you to apply the equity that you have in your home without experiencing to make monthly payments.
• A home equity line of credit also presents you access to your equity; all the same you will need to establish payments each month on the amount of money that you borrow.
There are different factors that you should also look at. For example with a home equity line of credit you need to show proof of income to your lender in order to qualify whereas with the reverse mortgage you do not require to as the lenders will obtain their money back when you or any one on the deed are no longer living in the home.
So, do you qualify for this type of loan? On That Point are only a a couple of qualifications that you must meet to be eligible. First, you and everyone on the deed must be at least 62 years old. Next, you must own the property outright or you may experience a real small mortgage left on the home. This property must too be your primary residence and you need to be living there. This is all you require to qualify for this type of loan.
Once you qualify you can receive your money one of several ways. You can get a lump sum payment, you can select to make set monthly payments, or use a line of credit option. The critical thing to remember with this type of loan is that you will never be tossed out of your home. The lender will hold back until everyone on the deed is no longer living in the household to collect their fees, principle and interest.
On That Point are a couple of negatives that you may also need to think about and those are higher interest rates, and higher fees. Since you are not making any monthly payments on the loan and the lender may need to delay years or possible decades to get repaid, they mostly charge more such interest than some other types of mortgages. The closing fees are likewise more money than a typical closing maybe.
So if you observe yourself suffering to really work at it to make ends meet, are at least 62 years old, and own your home, you should regard a reverse mortgage. Receiving this extra income can help you to retain the same life style and as most analysts will tell you that by the end of 2008 gas prices, on the national average, could be $5 or more a gallon let alone the increase in food prices.
