As seen on The Rhode Show
Have you heard the term “reverse mortgage” but find yourself unsure of what a reverse mortgage really is? Here is a quick primer on the ins and outs of reverse mortgages and why they can be a good option to help some seniors through retirement.
What is a Reverse Mortgage?
A reverse mortgage is a loan available to homeowners who are 62 years or older, allowing them to convert part of the equity in their home into cash.
One of the major differences between a reverse mortgage and a traditional loan is that a reverse mortgage does not require a monthly payment. To qualify for a traditional mortgage or a home equity line of credit, you must have sufficient income and acceptable credit to be approved for the loan. In a reverse mortgage, your eligibility is based upon your age. The loan amount you qualify for must be sufficient to satisfy any existing loans secured against your home.
Who gets a Reverse Mortgage?
Seniors age 62+ who own their own home and need access to additional monthly income, or want to free up money to travel or enjoy their retirement.
Why would someone get a reverse mortgage?
Nearly 80 percent of those age 62 and older own their own home1 and may have the option to use that home to help get them through retirement.
- Their home is their biggest asset - they are living in their piggy bank.
- A reverse mortgage can help if they’re living on a tight budget, have medical expenses, or want to travel or just free up money for day to day expenses.
- They don’t want to sell the house and downsize to gain retirement money because it’s their home and they want to stay there.
How does it work?
The first step in taking on a reverse mortgage is identifying your true monthly expenses with a comprehensive budget. Then, together with a reverse mortgage specialist, you devise the best options for you to use your reverse mortgage proceeds and go through the entire process in detail to ensure that a reverse mortgage is indeed the right fit for your circumstances.
To learn more about revere mortgages, including FAQ’s for seniors and children of seniors, contact Brian Mahone, Vice President, Washington Trust Mortgage Company at (774) 218-0582 or firstname.lastname@example.org or visit: https://www.washtrust.com/Wash-Trust-Mortgage/Common-Misconceptions-About-Reverse-Mortgages
Source: 1: US Census Bureau Housing Vacancies and Homeownership (CPS/HVS)