What Applying for a Reverse Mortgage is Like

What Applying for a Reverse Mortgage is Like

You might view retirement as an escape from the daily grind of work, but it comes with a whole new set of issues to deal with. One of those issues is making sure you have enough money to pay for essentials, the non-essentials you want, and any emergencies that may pop up. You might simply not have saved enough to do that before you retired. On a low fixed retirement income, it can be difficult to deal with whatever the expenses are that life throws at you. Applying for a reverse mortgage may relieve those pressures. Here is what the process is like.

Making Sure You Can Personally Get a Reverse Mortgage
The first part of applying for a reverse mortgage is making sure you meet the personal qualifications for one. To do that, you must prove you are capable of paying the taxes and other expenses associated with owning your home in the long-term. You also have to be at least the qualifying age of 62. The same goes for your spouse if he or she is signing the loan agreement with you.

Determining What Amount of Money is Available to You
Another part of applying for a reverse mortgage is making sure the home itself qualifies. To do so, it must be the home you live in primarily. It cannot be one you rent out to others unless it is a multi-family home and you live in one of the apartments yourself. The home also has to be worth enough to allow you to borrow against its value.

When it comes to reverse mortgages, home value is not exactly as it seems. There are online assistance tools called amortization calculators for reverse mortgages for that exact reason. Those reverse mortgage calculators are necessary because it takes a lot of information to calculate the total value of your home. For example, limits established federally on how much a reverse mortgage can dole out to you have to be taken into account.

Choosing the Method by Which You Want to Get the Funding
Another step in the reverse mortgage process is deciding how you want to be paid. No matter how you receive the money, you will owe no portion of it back for many years. The reason the different options are important is more for your own convenience. For example, you might be having trouble paying your utility costs. If so, having extra cash coming in monthly might be the best option for you. On the other hand, you can opt to get the entire total the reverse mortgage calculator comes up with as one large payment, if necessary. You can also choose to create an agreement by which you take out exact amounts of money whenever you need them, called a home equity credit line.

Getting Rid of an Existing Mortgage
If you begin the reverse mortgage application process with a traditional mortgage already in place, you have to get rid of that traditional mortgage. You do that by taking some of your reverse mortgage funds out immediately and using them for that purpose. Only then can the remaining money be spent for other purposes of your choosing.

Looking After Your Best Interests When Applying for a Reverse Mortgage
When applying for a reverse mortgage, make sure you are looking after your own best interests. That means selecting a lender you can trust. That might be a local lender or a federally-operated mortgage program. It also means delving into interest rates, borrowing limits and long-term consequences of the application process. That is why a visit to a reverse mortgage counselor is a good idea before you commit to any contracts.

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Shannon Lazovski

Shannon is a mother of two teens and a 16-year blogging/influencer veteran, a fashion leader, a beauty buff and an entrepreneur who exudes professionalism and knowledge on all four subjects. She is the CEO of Glameselle Beauty, The Lazov Agency and the owner of GlamorousMoms.com, DetroitMommies.com & DetroitFashionNews.com. She is also the Founder & Owner of the Glamorous Moms Foundation, a local non-profit supporting women and children in the community. She loves to promote products and brands she adores and is a trusted voice. Shannon has been awarded the Elite 40 under 40 award and has been featured on Fox 2 Detroit, WDIV Channel 4, WXYZ Channel 7 and TV20 Detroit, Dedicated Mag, Styleline Magazine and Metro Parent Magazine. When you see her, ask her about her lipstick collection!

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