Understanding a Greenwich, CT Reverse Mortgage

Many older Americans are currently strapped for cash and need more money to pay bills and medical expenses, and to simply enjoy retirement. One way for Greenwich, Connecticut senior citizens to increase financial security is to take out a reverse mortgage. A reverse mortgage allows homeowners 62-years and older to convert the equity in their homes into cash. A reverse mortgage is appropriately named, as its payment structure is the reverse of most loans. With a Greenwich, CT reverse mortgage, the lender pays the borrower.

Greenwich, CT Reverse Mortgage Qualifications
To qualify for a Greenwich, CT reverse mortgage, you must be at least 62 years old. There are no income requirements; however, you should not be significantly behind on your monthly mortgage payment. Some borrowers even take out a reverse mortgage to help pay off their original mortgage.

The Condition of Your Greenwich, CT Home
Another important reverse mortgage eligibility requirement considers the condition of your home. Any major damages, such as leaky roof or unsteady foundation, will hinder your chance of qualifying.

When you apply for a reverse mortgage, an inspector will come to your home to assess any damages. If there are major defects, you must locate a certified home improvement contractor to make repairs. If you do not have enough money to complete repairs before taking out a reverse mortgage, you may still qualify; however, you will have to complete all repairs one year after closing.

How Much is my Reverse Mortgage Worth?
The amount you can receive from a reverse mortgage depends on several factors, including the amount of equity you have in your home, current interest rates, the value of your home, and your age. You can receive the reverse mortgage amount in one large payment, in monthly payments, or as a line of credit where you decide how much you receive. Most borrowers choose to receive their reverse mortgage as a line of credit.

When Do I Repay my Reverse Mortgage?
Borrowers do not have to repay their reverse mortgage until the home ceases to be their primary residence. This happens when the homeowner sells the home, moves to another home, or passes away. You will never owe more on your reverse mortgage than the current market value of your home.

Disadvantages of a Greenwich, CT Reverse Mortgage
Reverse mortgages sound like a great idea, but they have a few downsides. First, reverse mortgages have higher interest rates than traditional mortgages. Additionally, in recent months, lending giant Fannie Mae modified payoff amounts awarded by reverse mortgages. Now, borrowers cannot lock in their interest rate until the time of closing, meaning that borrowers will not know how much money they qualified for until the last minute. A Greenwich, CT reverse mortgage also contains lots of up-front costs, such as origination fees, appraisal fees, and other fees similar to traditional mortgages.

Should I Get a Reverse Mortgage?
A Greenwich, CT reverse mortgage is a great way for homeowners to increase monthly cash flow to pay bills, existing debts, basic living expenses, health care, and more. You may want to consider other loan options, such as a home equity loan, if you plan to move from your home in the next few years or if you have children planning to move into your home after you pass away. After the homeowner dies, the lender typically sells the home to recoup the reverse mortgage payments. Children may, however, pay off the reverse mortgage themselves if they plan to keep the home.

Speak with a Greenwich, CT Reverse Mortgage Counselor
The main consideration when speaking with your financial advisor about a reverse mortgage is to make sure that taking that course of action will not leave you more financially strapped than before. Be sure you understand all terms and conditions of your reverse mortgage, as well as other options available to you.

Greenwich, CT Reverse Mortgage
Greenwich, CT Reverse Mortgage