BRIDGEWATER, N.J., Mar 25, 2009 (BUSINESS WIRE) ----Reverse mortgages have become an increasingly important financial tool for people 62 and older who want to remain in their home and fund their retirement. And, with 78 million Baby Boomers approaching retirement, interest is expected to grow. Despite this, many Americans are still unclear about how reverse mortgages work and when they may be appropriate.
"A reverse mortgage is a loan secured by the value of a house, where no repayment of the loan is required until the borrowers permanently vacate the home," explained Peter Bell, president of the non-profit National Reverse Mortgage Lenders Association. "Although historically, this has been of particular interest to those with limited sources of liquid income, these days, there are many new retirees considering a reverse mortgage as an option after looking at all the other assets they've accumulated. This tool can help a person avoid taking Social Security too early or defer taxable withdrawals from IRA or 401(k) balances."
"Reverse mortgages enable many Americans to 'age in place' comfortably in retirement," said Donna DeMaio, president of MetLife Bank. "For many people, reverse mortgages are a good way to continue to stay where they are, remain independent, and live a more fulfilling life. Modern retirement income planning is about making the most of what you have, and reverse mortgages can be an important part of that plan."
There are several advantages to securing a reverse mortgage. Borrowers can continue to live in the home as long as they want, and the amount owed to the bank by the borrowers when the property is sold will not exceed the lesser of the mortgage or its sale value. Interest and charges, including origination and closing costs, accumulate until that time, with no periodic payment required. As with traditional mortgages, the bank does not own the client's home: borrowers retain ownership, and are responsible for paying property taxes and homeowner's insurance, as well as property repairs.
So, when does a reverse mortgage make sense? Consider the following questions.....
Six Questions to Ask When Considering Reverse Mortgages - FOXBusiness.com
Posts
No comments:
Post a Comment