Yes
This is one of the first reasons that Reverse Mortgages were established. Seniors with fixed incomes are struggling more and more to meet their monthly bills and to buy the right foods to stay healthy.
As I stated on my first blog, I will keep all my answers consistent and honest. This is one of the ways in which a reverse mortgage eats away at your net worth. When you get a reverse mortgage and it is used to increase the monthly income of a senior, the payments are called tenure payments.
When you get a reverse mortgage and set up tenure payments, you are effectively setting up an "insurance-like" instrument. The tenure payments are guaranteed to be paid each month for the rest of your life. No matter how long you live, these payments will be made. The loan is backed by HUD, so the payments are guaranteed by the government.
While you are receiving these payments, the loan repayment amount increases by the amount paid to you that month plus the interest on all of the previous payments.
Like all reverse mortgages, you keep title to your home, and there are NO mortgage payments. If the home increases in value, you can refinance the reverse mortgage and get more money each month. If the home goes down in value, your payments still stay the same.
After you pass away, the person(s) that you willed your estate to will have the option of paying off the reverse mortgage loan or selling the house. They will have up to a year to sort out what they want to do. If the house is worth more they can sell it and get the extra value in cash. If the house is worth less than what is owed, they simply turn it over to the bank and walk away without having to pay any of the lost value.
I started in this industry because there are too many seniors living below the poverty level that own a home. It is time for the home to start working for you.
Bob
bob@az62.com
www.az62.com
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