With so many loan choices, it can be quite confusing when deciding which is the best fit for you (and your finances). One type of mortgage that I have heard of, but am not too familiar with is reverse mortgages. I remember my dad talking about them, wondering if one of these loans might benefit him. He had plenty of equity in his home to qualify for a reverse mortgage, although he never took advantage of actually doing it.
My husband and I are fortunate enough to be able to retire in a few short years and even if we aren’t quite old enough to qualify for a reverse mortgage yet, it might be something we look into in the future. Out of curiosity, I recently browsed around on the internet to see exactly what a reverse mortgage is. Basically if a person or couple over 62 years of age has substantial equity in their home, they can take a loan out to turn that equity into cash. Even though their home might be “rich”, they might not have much of a cash flow. Why struggle or do without when they can have money. Their own money that is just tied up in their house.
A reverse mortgage is like borrowing your own money. Interest does have to be paid back, and the homeowner need to keep up with the insurance and property taxes. It really does sound like a great way to enjoy the golden years. Maybe a vacation would be in order too! All reverse mortgage lenders are not created equal, however, so make sure you do your research if you are considering a reverse mortgage!
