How Am I Going To Pay Back My Reverse Mortgage?
Thursday, July 1st, 2010The most common misunderstanding about a reverse mortgage has to be the Repayment Schedule. Too many times, family members intervene during the education process about the product and confuse the basic tenets of the product.
A Reverse Mortgage is designed to NOT require repayment of the loan during the life of the client. Due to the client’s financial condition, they may begin making payments. For some individuals it makes perfect sense, but it is not mandatory to do so. I would like to describe to you one of these cases.
Towards the start of the year, I sat down with a past client who needed to refinance his condo loan. With him still in the work force and making a reasonable source of income. Both him and his spouse were 63 years old. There was some equity left in their condo, but the market had dramatically affected the appraisal value.
The main reason this gentleman wanted to refinance his loan or get money out of his property was to aid in his son’s education to graduate school. Due to the market situation, his age, his overall income and the value of his property, a forward mortgage refinance would not allow him to save any money monthly over what he was currently paying.
I shared with him the structure of the reverse mortgageand went over the finer points. In a reverse mortgage, you have the ability to tell your lender how much your monthly payment will be and what is convenient for you.
My client has the option of making a monthly payment or not because he chose a reverse mortgage. The first month, my client made a $125 payment. The next month, he was able to skip a payment entirely. A few months later, he picked up a new client and was able to make a $500 payment. The pressure of making a mortgage payment was not there. Are you feeling kind of stress? A reverse mortgage could be the answer for you.
If you would like to learn more or you’re just curious to see if a reverse mortgageis a viable product for you then contact me.
If you need more information then click this forMore information on reverse mortgages