Posted on: 28 August 2017
Planning for retirement is something experts recommend doing when you are young. Unfortunately, there are a lot of people who do not do this at an age that is young enough to provide a sufficient amount of time to save up enough for retirement. There are also times when unexpected things happen in life that cause people to use up the money they had saved for retirement. In either case, using a reverse mortgage is a solution for seniors that do not have enough cash flow after they retire.
What Is a Reverse Mortgage?
The first thing you will need to understand is what a reverse mortgage is, and the easiest way to describe is that it is a loan that works exactly opposite of a regular mortgage. With a regular mortgage, you borrow money to buy a house and repay the lender by making monthly payments. A reverse mortgage lender gives you money from the equity in your house by making payments to you. You do not have to pay the bank back for these payments until you get rid of the house.
How Does This Solve a Low Cash Flow Problem?
Taking a reverse mortgage solves a low cash flow problem in one main way. A reverse mortgage offers a way to use the equity in your home without making payments. You will receive payments from the lender instead of making the payments. This increases your cash flow.
What Does It Take to Qualify?
If you are interested in using a reverse mortgage to relieve your low cash flow problems, you will need to make sure you meet the requirements for one. Fortunately, there are only a few requirements. The first is your age. You cannot apply for a reverse mortgage unless you are at least 62 years of age.
The other main requirement you must meet is having equity in your home. If you own your home outright, you will qualify. If you only owe a small percentage on your home, you will probably also qualify.
Some lenders factor in a person's credit score, but most do not, which means you will most likely qualify for a reverse mortgage if you are old enough, have equity in the home, and have bad credit.
To learn more about reverse mortgages and how one could solve your financial problems, contact a lender today to get started with the application process.Share