Reverse Mortgage – Maine Baby Boomers
Baby boomers will be reaching retirement in the next few years and many of them are starting to prepare for their golden years by getting in shape, eating a healthier diet, planning trips and starting hobbies. Although these are all great things to consider, their main focus should be on how they plan to finance their retirement.
Unlike their more prudent parents, studies show that aging Boomers are paying off their debts and mortgages, as well as funding their active lifestyles, by acquiring reverse mortgages, while staying in their primary residence.
According to a recent report by the United States Department of Housing and Urban Development, there has been a 77 percent increase in government backed reversed mortgages, bringing the total to more than 76,000 nationwide. Throughout the next 10 years the majority of those born during the Baby Boom generation, which is 1946 through 1964, will be eligible for a reverse mortgage, meaning the popularity of reverse mortgages will continue to grow.
If you or someone you know is planning for retirement and is looking for a supplementary income then a reverse mortgage could be the right option for you.
There are many reasons to use a reverse mortgage.
- Pay off an existing mortgage
- Pay off other debt such as credit cards, medical bills, property taxes
- Home repair and/or renovations
- Home health care and/or assisted living
- Buy a new car
- Buy a vacation home
- Take a trip
- Fund your grandchild’s education
- Donate to a cause
The reverse mortgage has earned its name because the payment stream is “reversed”, meaning that instead of making monthly payments to a lender, as with a regular first mortgage or home equity loan, a lender makes payments to the borrower.
Though there are no income or medical requirements to qualify, borrowers must be at least 62 years old and own their home. The money the borrower obtains from a reverse mortgage can be used for anything from daily living expenses and home repairs, to that long awaited trip to Tahiti.
The amount accessible to a homeowner through a reverse mortgage relies on three factors; the value of the home, the interest rate and the age of the borrower. A homeowner with a more valuable property will receive a larger loan, often times up to half of the home’s current value. The loan’s interest rate also directly affects the amount that can be borrowed, meaning the higher the loan’s interest rate, the less the homeowner can borrow. And, older borrowers are expected to remain outstanding and accrue interest for a shorter period of time, resulting in less interest per dollar and a larger loan.
If you would like further information about Maine reverse mortgage qualifications or to find out which program best suits you then contact me direct at 888-775-4200.