How to Use the Reverse Mortgage
The reason I'm writing this article is I'm getting many questions from my customers asking me if this is the reverse mortgage is the right answer for them.
Im of the opinion that the reverse mortgage is purely situational. It is not something that one should go blindly into.
Most people calling me don't have tons of money in stocks, bonds and savings. They have very little and need money, which is why they are calling me.
Some have low fixed incomes and others still have jobs.
When they ask me their question Im primarily focused on their long term equity position in their homes. They may need that equity if a major financial issue presents itself.
Every day of our lives we roll the dice. Sometimes it comes up snake eyes and we must be there to answer the call.
Along these lines I like to see prospective borrowers use the mortgage intelligently to increase their disposable income and to use that income in the proper places.
For most the equity in the house is their largest asset it may be needed for a vital reason. The point is once its gone these folks wont have another money source to draw on.
The point here is to use it as a last resort. If it is possible to keep making mortgage payments on a current mortgage it may be best to keep doing so and wait to pay it off with a reverse mortgage.
If there is no mortgage I like to see folks use the line of credit option and use their proceeds sparingly. By using proceeds this way interest accrues minimally against the equity of the home.
A real benefit of this LOC is it actually grows over time and benefits the borrowers. Any unused money in the LOC gains interest for the borrowers favor.
The whole point here is to be conservative with your biggest asset. If you need to take a trip or use a bit for fun money, do so. Life is for living, but use the rest frugally.
Im of the opinion that the reverse mortgage is purely situational. It is not something that one should go blindly into.
Most people calling me don't have tons of money in stocks, bonds and savings. They have very little and need money, which is why they are calling me.
Some have low fixed incomes and others still have jobs.
When they ask me their question Im primarily focused on their long term equity position in their homes. They may need that equity if a major financial issue presents itself.
Every day of our lives we roll the dice. Sometimes it comes up snake eyes and we must be there to answer the call.
Along these lines I like to see prospective borrowers use the mortgage intelligently to increase their disposable income and to use that income in the proper places.
For most the equity in the house is their largest asset it may be needed for a vital reason. The point is once its gone these folks wont have another money source to draw on.
The point here is to use it as a last resort. If it is possible to keep making mortgage payments on a current mortgage it may be best to keep doing so and wait to pay it off with a reverse mortgage.
If there is no mortgage I like to see folks use the line of credit option and use their proceeds sparingly. By using proceeds this way interest accrues minimally against the equity of the home.
A real benefit of this LOC is it actually grows over time and benefits the borrowers. Any unused money in the LOC gains interest for the borrowers favor.
The whole point here is to be conservative with your biggest asset. If you need to take a trip or use a bit for fun money, do so. Life is for living, but use the rest frugally.
About the Author:
For those living in Texas.. learn about the HECM right here. Also, you can get another along with oodles of education about the HECMright here.
posted by Debt Consolidation Loan at
5:17 AM
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