South Carolina Reverse Mortgage is here to help you with the decision as to whether a reverse mortgage is right for you. Our councilors serve the Charleston South Carolina area and would love the opportunity to discuss your specific needs. Call us today at 843-353-6071 for a no-obligaton consultation.
Advantages And Disadvantages of Reverse Mortgage
If you are thinking of a reverse mortgage, it is not a good idea to plunge right ahead and submit your application right away. Learning the advantages and disadvantages will help you come up with a wise decision in so far as financial loans are concerned.
For most people, this program is a savior because of the positive impact it brings to the quality of life of most senior citizens. First is because of flexible financial program and the limited restrictions on how they can receive and spend the loan. There is no default risk since the home is yours under most circumstances and the lender has no right to take it away.
The total of what you will owe the bank will not be more than what your home is worth even though you may get more from the lender. This advantage is particularly interesting especially if the value of the home depreciates or declines.
Reverse mortgages are also tax free since the proceeds are loans and not income, whether you receive it lump sum or fixed monthly cash flow. They offer flexible payment options, from options of credit line, annuity, lump sum, or combination. They ensure your home ownership and no income qualifications are set for you to avail the program.
You are protected because the federal government has set some strict regulations and safeguards to avoid the lending predators from taking advantage of the rather vulnerable senior citizens. One positive effect on the life of the applicants is the receipt of payments even if the lender defaults on your reverse mortgage loan. And of course, you can use the funds on whatever you want to spend it.
Just like in any other mortgages, along comes the disadvantages:
It is not recommended for senior citizens to take this program if they are planning to move out and not stay in their homes for a long period of time. This is because the moment you do not live in your home, your home mortgage repayment takes effect.
This is not good since most up front closing costs that lenders make are usually higher than other types of loans. So, in this aspect, reverse mortgages are not recommended for the people who are not keeping their home as primary residence.
Reverse mortgage can also decrease equity of the home and in effect affects the estate. It is for this reason why many do not consider reverse mortgage because they want to leave the home to the heirs. However, the heirs also have the option to keep and refinance the home, sell it if it’s worth becomes higher than what it is owed.
Reverse mortgages can be advantageous or disadvantageous to some people, but under the right circumstances, they can be good financial retirement option to others. The best way to discover if a reverse mortgage is right for you is to have a discussion with a qualified counselor. Call our office today to get your questions answered.
South Carolina Reverse Mortgage Services
Charleston, SC 29401