Retirement is one period of our lives when we have the freedom to do whatever we want. You could decide to start a business of your home, take up a new course program, spend quality time with your family and friends, or even take a solo trip to your dream location. There is so much you can do after you retire from your job. However, the amount of freedom you enjoy is partly proportional to the resources you have, and by that, I mean finances. Without money, you can barely feed, not to mention going on vacation to Paris. One way you can secure your future is to take a reverse mortgage. But how do you qualify? The answer is simple – through a reverse mortgage calculator.
Knowing and Understanding a Reverse Mortgage
A reverse mortgage stands out from the standard home loan. With the traditional loan, the lender requires you to repay your loan every month or risk losing your home. As a result, you have to meet strict deadlines. So, what happens if your monthly repayment is $2,500 and you can barely make $1,000 a month? How do you comply with your lender’s terms and conditions? Most retirees will find this situation to be nightmarish.But when it comes to a reverse loan, it is a different ball game entirely. In actuality, your lender pays you for your home – whether it be a private lender or a government agency. In other words, they purchase the house from you and pay you for it while you still live in it. Another you should know about a traditional loan is that it is a short-term loan. Most of these loans can span a period of five to ten years, depending on your agreement with the lender. For a reverse mortgage, you can reside in your home for as long as you want.
Steps to Taking a Reverse Mortgage
Before you qualify for a reverse loan, you have to meet specific requirements. You should be age 62 and above and must reside primarily and permanently in your home. Vacation homes and rented apartments don’t pass for a reverse mortgage. Your lender will also determine your creditworthiness with the help of a reverse mortgage calculator tool. This evaluation tool will assess your home’s equity and how much you can take on it. According to federal law, retirees and homeowners can’t take their entire home value.
How Can I Receive My Funds?
Once you qualify, you can set up your payments in any of the three options, or even all. One way to set up your reverse mortgage fund is as a line of credit – consider this as your credit card. It allows you to borrow money whenever you want. Another option is to set it up as a monthly payment. By doing so, you can create a monthly budget to meet your expenses. Finally, you can receive your funds as a lump sum. If you have several needs that require funding, then this option is ideal for you. A reverse mortgage offers you financial freedom after retirement.