Have you considered using your home’s equity for a little extra cash, possibly some home renovations, or even pay off some debt that has a higher interest rate?
If you’re an older homeowner looking to loosen up a little extra cash, you may wonder if tapping into your home equity is a good idea. According to experts, it is indeed a good idea, but not by the traditional refinance route.
A reverse mortgage is a better, and increasingly popular, option for older Americans to convert home equity into cash. Money can then be used to cover home repairs, everyday living expenses, and medical bills.
So how does this work? Instead of making monthly payments to a lender, the lender makes payments to the homeowner, who continues to own the home and hold title to it.
According to the National Reverse Mortgage Lenders Association, the money given by the lender is tax-free and does not affect Social Security or Medicare benefits, although it may affect the homeowners’ eligibility for certain kinds of government assistance, including Medicaid.
Do you qualify? Let’s find out. Homeowners must be at least 62 years of age and own their own homes to get a reverse mortgage. No income or medical requirements are necessary to qualify, and you may be eligible even if you still owe money on a first or second mortgage. In fact, many seniors get reverse mortgages to pay off the original loan.
Repaying a reverse mortgage is not necessary until the property is sold or the owner moves. Should the owner die before the property is sold, the estate repays the loan, plus any interest that has accrued.
If you have a local property here in Cape May County, find out your properties value here!