Getting a reverse mortgage can be unsettling for senior homeowners. But your family members, and especially you, can avoid the jitters by learning about reverse equity plans that offer tax-free income during retirement years.
First of all, are you over the age of 62? If so, a reverse mortgage could offer you a more comfortable lifestyle. With that being said, it is prudent to examine the program closely to avoid any pitfalls. You need to ensure that these special home loans will enhance your retirement income. Let's start!
True or false? The income received by senior homeowners from reverse home mortgages is tax free.
Although income generated from reverse mortgage should be tax-free, only a financial professional trained in government and private-based retirement income programs can advise you based on your financial circumstances.
Furthermore, Medicare benefits are generally not diminished by reverse mortgage income. However, anyone receiving Medicaid or SSI needs to get professional advice before moving forward.
To evaluate the effects of receiving reverse mortgage income on your finances, consult appropriate professionals on this list...
Ask about specific program rules. Some of these experts can evaluate your personal situation and advise whether reverse equity mortgages will enhance and not not adversely affect your retirement income.
Reverse equity mortgages should not be confused with traditional forward (vs. reverse) home equity loans, equity lines of credit, or 2nd mortgages. Not only do forward equity mortgages need to be repaid on a monthly basis, they generally have few fees.
Not so with reverse mortgage plans. Care should be taken when considering the cost because fees eat away at equity, resulting in less income. So it is always prudent to get an up-front estimate of all charges before signing paperwork.
It goes without saying that buyer beware is a fitting statement.
By George from Rockaway, New York
I have a reverse mortgage, am a senior citizen with a low income.
A contractor did work on my home. The work was awful and left only 60% complete.
He put a lien on my home and I received a letter that he wants to foreclose on me. Can he foreclose on me?
I'm happy to hear you are seeking help. I recommend you seek legal counsel immediately.
Of course, I understand hiring an attorney may not be affordable. So here's an idea that I passed onto Tom from Indianapolis, IN, also on an extremely limited budget.
Tom needed to take legal action against his previous loan servicer. You can read about the Tom's suspicions of fraud being committed in his name at Predatory Lending Laws. (Scroll down the page for Tom's letter and my response.)
You'll also be interested to know a few weeks later he reported back to me of his success utilizing my suggestion. Read Tom's update!
Best wishes for resolving the mechanic liens,
I'm often asked if homes with reverse mortgage financing can be taken away from the owner? You cannot outlive your mortgage neither can you or your heirs be required to pay back more than the house is worth after it is sold.
Do you have a question about a reverse home mortgage?
Ask Kate is specifically designed to answer your questions and create dialog regarding mortgage financing. Every question is a good question.
Next in this series, learn how HUD's stable reverse mortgage program creates income for senior homeowners.
Important: Senior homeowners should consult a financial planner, tax accountant, and/or attorney as applicable to evaluate their circumstances before financing with a reverse mortgage. Even if not a loan requirement, reverse mortgage counseling is highly recommended.
January 2016: The Mortgage Forgiveness Debt Relief Act Update.
September 2015: Fannie Mae and Freddie Mac Improve Loan Modifications.
Keep on the right path at A Homeowner's Survival Guide to the Intimidating Mortgage Process.
Please tell your friends about Reverse Mortgage Income for Senior Homeowners. I hope you'll come back and visit often.
Aug 11, 16 10:49 AM
Aug 11, 16 10:18 AM