We rack up our pennies to save for retirement most of our adulthood. However, come retirement, most of us have less than $100,000 saved up. With debts constantly increasing and income staggering, many citizens are unprepared for retirement.
Thankfully, for homeowners who are at least 62 years old, a reverse mortgage is a great way to boost your income. As long as you occupy your home and build sufficient equity, you can fall back on a reverse mortgage to keep you on your feet.
While it may appear as an outstanding solution to meet financial obligations, the real question is how much hard cash does a reverse mortgage remunerate? There’s no straight answer, and the amount of money at your disposal will vary according to various factors.
Where does the money come from in a Reverse mortgage?
The exact amount of money you’ll be granted depends on a few different components, including age, the current market value of your home, interest rates, financial obligations, and the distribution type of choice.
Your current home appraisal will also help you determine what your eligibility will look like—the higher the economic value, the higher potential to put a fair amount in your pocket. Intertwined, current interest rates can also affect how much money you’ll receive. The lower the interest, the higher the accessible funds.
In general, homeowners who have over 50% equity in their residence have a higher chance of qualifying for this type of loan. Meanwhile, when there’s a notable mortgage balance remaining, the payout may not be worth it. Loan proceeds will invariably go towards paying off existing liens.
A reverse mortgage supplies borrowers with the most disposable cash when the home is paid off or the balance is low. As of 2019, the maximum payout from a reverse mortgage is 679,650$. However, most applicants can expect much less.
Who can apply for a Reverse Mortgage?
You must be at a minimum of 62 years old to qualify for a reverse mortgage. However, the older you are when you take out this loan, the more cash you’ll access. The estimated length of your loan is a critical factor in whether you’ll receive the best payout.
Additionally, fees and other financial obligations may alter your payment. You must pay off your existing mortgage balance before assessing how much money you’ll receive. Once you’re approved, you will choose how you would like to receive the loan amount. You may select an upfront lump sum, monthly payment, or a line of credit. It all depends on what serves your situation best.
It may not seem like there’s such a difference on the surface, but it can alter the outcome dramatically. Due to the continuously changing economy and rising house costs, evaluate your options carefully.
Only you can tell whether a reverse mortgage is a suitable solution for you. No program will be the right one for every homeowner. With the proper research, tapping into your home equity could be worth it.
Get to Know Kevin A. Guttman Reverse Mortgage Specialist
As you can see there are a lot of steps to getting a reverse mortgage but it doesn’t have to be complicated when you have a professional help you along the way.
Contact our team today to get the wheels in motion at (877) 251-9709