Why You Should Consider a Reverse Mortgage

For those who have reached age 62 and still want to remain in their homes a reverse mortgage may help you do just that. While many people have planned for retirement there are a great many people who work for companies that do not have a pension plan. Those who work for companies who don’t provide a paid pension plan you may make the mistake of thinking you can get by on Social Security benefits alone. Even those who have pensions find they have to live on half of what they did when they were working thus creating the need for a lower standard of living.

Fortunately for those who have been in their home long enough to build a substantial amount of equity there is a way to solve the problem without having to sell their homes. The answer is a reverse mortgage where people 62 years old or older can cash in on the equity in their homes and not have to pay the money back until they sell their home or die. There is no provision in place telling a homeowner how to use the money, so you can pay bills with it, go on vacation, pay off high interest debt or anything else you feel compelled to do.

The amount of money you can obtain in a reverse mortgage depends on your age, the interest rate and the value of your home but there is currently a limit of $625,500 that is good until the end of 2009. There is talk about a reduction in the current limits, so if you are eligible for a reverse mortgage you may want to make a decision quickly. The previous limit was $417,000 and there is some talk about returning to that level after the current HUD provisions expire. Of course, if your home does not fall into the higher priced category this will have no effect on you.

Obtaining a reverse mortgage will allow you to do those things you may not be able to do otherwise—or even just have enough cash to make ends meet. One of the major advantages to a reverse mortgage is that the funds you withdraw are non-taxable. You can add funds to your monthly budget without having to pay additional taxes to do so which you would have to do if you chose to go back to work to make the same amount of money. You also want to keep in mind that Social Security puts a cap on the amount of money a retiree can earn but since a reverse mortgage is not income it is exempt from those provisions.

Obtaining a reverse mortgage means you can use the equity in your home without having to sell it or refinance it. There are no monthly payments to make as there would be if you took out an equity loan on your home. The only thing to remember is you cannot obtain a reverse mortgage on a time share no matter how many weeks a year you stay there—you can only obtain a reverse mortgage on your primary residence.

A thirteen-year veteran of the mortgage industry, Robert Griffin specializes in reverse mortgages and has helped over 3000 Americans find financial security with a reverse mortgage. The owner of Griffin Financial Mortgage LLC, based in Fort Worth, Texas, his memberships include the National Association of Mortgage Brokers (NAMB), the Mortgage Bankers Association (MBA), the National Reverse Mortgage Lenders Association (NMRLA) and the Better Business Bureau (BBB). Robert Griffin is also co-author of "62 Senior Moments." If you would like more information, please call (866) 683-3690 or visit our website to research a Reverse Mortgage Lender.