6 Undeniable Benefits of a Reverse Mortgage

[The Joseph Wilkerson House set contains 13 images] This is a creative commons image, which you may freely use by linking to
[The Joseph Wilkerson House set contains 13 images] This is a creative commons image, which you may freely use by linking to this page. Please respect the photographer and his work. Boydton in Mecklenburg County, Virginia has an unusually large number of old houses for a town of about 500. Part of Boydton Historic District, this wood Queen Anne was built by Joseph Wilkerson, a contractor, in 1912. The front façade has both a gable and a dormer projecting from the central hip roof, each with a round-headed casement window. A two-story bay is marked by the gable projection, containing large windows on both levels; these windows are six panes wide of two different sizes, 12 smaller on top and 6 longer on the bottom. Brick steps lead to the porch entrance, which is pedimented; this entrance is flanked on both sides by a turned post balustrade. The porch is wraparound—the main porch and a small portion extending back from the gazebo-like bay, domed with a finial. The bay divisions of the porch are marked by wooden, fluted Ionic column supports for the roof. The single door entrance has sidelights and a segmented transom. On top of the house is a widow’s walk. The cast iron fence with gate was the one-time fence for the Courthouse Square in Boydton to keep cows off the lawn. The Boydton Historic District was added to the National Register of Historic Places May 16, 2002 with reference #02000511 The house, on a 1.63 acre lot, apparently has been sold. It has 3,844 square feet; online realtor information states 4 or 6 bedrooms, and 2 1/2 or 3 1/2 baths. Online information also lists the date of the house as 1905. It also lists the contractor as Wilkinson rather than Wilkerson. The perennial question—how credible is information online? The foundation of my information is from the Virginia Department of Historic Resources: www.dhr.virginia.gov/registers/Counties/Mecklenburg/173-5... This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License

A reverse mortgage is a feasible financial vehicle that is used by plenty of older Americans to access cash from their home's equity. We'll outline six undeniable benefits these home loans offer.

For older Americans age 62 and up, they can tap into their home's equity using a reverse mortgage. According to the Washington State Department of Financial Institutions, there is a long list of benefits that these reverse mortgage home loans can offer, many of which are worth considering.

1. Not Solely Based On Credit Score Or Income, However Under The New Financial Assessment Rules You Do Need to Demonstrate a Capacity to Continue Paying Taxes And Insurance On The Home . One of the most advantageous benefits of a reverse mortgage is that they are not based upon your income or your credit score. Bankrate explains that these loans are solely based upon homeownership and existing, accrued equity in the home. In short, if you own your home and have paid down the balance while meeting the qualifying age of 62, you can generally get approved.

2. Numerous Payout Methods. According the Consumer Financial Protection Bureau, there are several ways that you can get paid out the sum on your reverse mortgage.

These include:
  • A line of credit that you draw upon that can increase over time.

  • A monthly tenure option that pays you a monthly payment.
  • A monthly term that pays fixed monthly payments over a set term.
  • A fixed-rate, lump-sum option that pays you the entire proceeds at once.
  • 3. Can Be Federally Insured
    According to the
    , A reverse mortgage is only available through the FHA via a Home Equity Conversion Mortgage or HECM. The only way that you can get this type of an insured loan, though, is by going through an FHA approved lender.

    4. Tax-Free Funds. You can borrow the funds from your reverse mortgage without having to pay any income tax, says the IRS. This is because these funds are considered a loan, not income, and are therefore not taxable. Make sure you consult with a financial advisor or accountant for any professional tax advice.

    5. No Repayment Required. The Consumer Financial Protection Bureau advises that you do not have to pay back a reverse mortgage unless you sell or move from the home. If the home remains your primary residence, no payments are made until you and your spouse have passed away.

    6. Home Ownership Is Still Retained. The New York State Department of Financial Services advises that you retain the title of the home with a reverse mortgage. But the lender will place a lien on the title in the amount of the monies borrowed. So if you do end up moving or selling the home, that lien will have to be satisfied before any remaining monies are paid out.

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