Going Forward with a Reverse Mortgage
Posted by David Zadareky on Thursday, May 19th, 2011 at 4:39pm.
As an older homeowner, you might find yourself house rich but cash poor. While you live in a beautiful house in Arlington, Alexandria, or other areas in Northern Virginia, you can’t get cash through traditional financing due to lack of income or a poor credit score. If this sounds like you, and you’re 62 or older, take heart. That beautiful house of yours can give you money through a Reverse Mortgage.
According to Houselogic.com, with a reverse mortgage you receive money based on your age, the accrued equity in your house, your home’s market value, and current interest rates. You don’t repay the loan during your lifetime as long as you live in the house and keep up with taxes, insurance and necessary repairs. Some qualifying factors include: 1) being age 62 or older; 2) having a mortgage that’s fully paid or has only a small balance; 3) not being delinquent on federal debt such as taxes or student loans.
Is this right for you? It depends. Generally, if you are retired, have substantial equity in your home, or have significant financial need, it could be a good option. Also, if you’re looking to buy a different home but can’t get financing, a reverse mortgage might help. Just know that all the same criteria apply to the new home. Currently, MetLife has very attractive interest rates for people who want to buy a home using a reverse mortgage. Their lowest fixed rate is 4.5 percent, and their lowest adjustable is 1.704 percent.
There are some key things to remember about a reverse mortgage.
- The lender will not own your home. You retain the title.
- Your income is not a factor. Lenders qualify the property, not the borrower.
- Your credit score does not matter.
- Most importantly, you’ll never have a mortgage payment.
Before making this decision, it’s best to meet with a qualified housing counselor and a knowledgeable real estate agent. For many people, a reverse mortgage will keep them happily living in a home they love, mortgage free, for the rest of their lives.
If you or someone you know is age 62 or older, let me show you how to buy a home in Northern Virginia with no income and never have a mortgage payment for as long as you make that home your principal residence. Work with an exceptional real estate team committed to Going Beyond Your Expectations. That team is RE/MAX Evolution & David Zadareky.
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