A reverse mortgage is a distinctive type of loan that is available to borrowers who are 62 years or older and allows the homeowner to live in their residence without paying a mortgage payment in exchange for equity from their home. Although there are many misconceptions regarding this type of loan, and it may not be the best financing option for every borrower, there are several benefits to obtaining a reverse mortgage. Dan Turner with Geneva Financial, can work with you to determine if a reverse mortgage is a suitable home financing option for you, and can help guide you through the process of obtaining a reverse mortgage in the regions of Hawaii, Illinois, and Ohio.

Here are the top ten reasons for senior citizens to get a reverse mortgage.

1. You Will Eliminate Monthly Mortgage Payments

With a reverse mortgage program for Seniors, it is not necessary to pay mortgage payments. Instead of paying down your mortgage over time by making those mandatory monthly payments, your monthly interest is added to the main balance of your mortgage. Because of this, your balance does increase over time (which may help you with future financial needs (e.g. medicaid protection, additional income, expense offset strategies, etc.), but you also have no monthly payment, so a very large monthly expense is eliminated, which relieves undue stress on your investment portfolio. The average mortgage payment can be as much as half (or even more) of your retirement income!

2. You Will Have Steady Income

In a reverse mortgage program, a Borrower receives equity from their home, and in exchange, you get a designated monthly amount of cash or credit growth. Since most older adults live on a fixed income, a reverse mortgage increases a borrower’s monthly stipend, allowing for financial peace of mind in case the need for additional money arises (such as the upcoming 2033 Social Security benefit reduction), or making income adjustments to keep up with inflation. You may also use the income feature to make other loan payments!.

3. You Can Have Financial Flexibility and Peace of Mind

Borrowers can use the additional income from a reverse mortgage for any good reason. Many people use it for home improvements, health care, debt consolidation, etc., but the money can be used for any reason.

4. You Can Stay In Your Home Long-Term

A reverse mortgage allows seniors to live in their home for as long as they wish, in fact, one of the requirements is that the borrower must live in the home. As long as you live in the home as your primary residence at least half of the year plus 5 days, you will continue to receive equity from the program. Additionally, you are free to travel without violating the terms of your agreement.

5. Reverse Mortgage Income Is Tax Free

The money obtained through a reverse mortgage is not considered taxable income, so is therefore tax free.

6. Reverse Mortgage Is At Low Risk Of a Default

In a reverse mortgage, your home cannot be taken from you for not making monthly payments, although you do still need to pay for home upkeep, insurance, and taxes on the property.

7. You Can Receive Flexible Payment Options

There are several different types of reverse mortgage options, and you can choose how you want to receive your monthly payment, whether it is a sum of cash, a line of credit, or annuity payout strategy of some sort.

8. You Will Have a Prolonged Payment Obligation

Under a reverse mortgage, you do not need to make a payment on the home until you move out, sell the home, or pass away.

9. You Could Retire Earlier

If you are 62 years of age or older and have enough equity built up into your home, a reverse mortgage enables you to have the financial freedom to retire early.

10. You May Not Have To Pay Additional Housing Costs Upfront

Out of pocket housing costs may be minimal because you can possibly refinance closing costs, private mortgage insurance, and other required housing fees into your loan.

Getting Help With a Reverse Mortgage

When you think about it? That reverse mortgage program may be very beneficial to you, and if you’re located in the areas of Hawaii, Illinois, and Ohio, contact Dan Turner with Geneva Financial. We can help determine your eligibility and help you understand what financing option works best for you.