The Benefits of Reverse Mortgage for Long Island Seniors

Reverse mortgages have become more popular in recent years. For many of Long Island’s seniors, the ever-increasing cost of living on a fixed income is a daily challenge. Often seniors look to the equity in their homes to relieve some of their financial pressure.

A reverse mortgage is a secured loan on your home. It allows you to convert a portion of the equity in your home into cash. It is called a reverse mortgage because instead of making monthly payments to a lender, as with a traditional mortgage, the lender makes payments to the borrower. The payout may be received as cash, an income stream, a credit line, or any combination of the three.

In order to take advantage of a reverse mortgage, there are some requirements:

• The homeowner must be at least 62 years of age. If the mortgage has more than one borrower, the youngest must meet the age requirement.

• The home must be equity positive.

• Homeowners insurance must be maintained.

• The borrower must continue to pay property taxes.

• Any encumbrances on the home must be paid off or must be low enough to be paid off with the reverse mortgage proceeds.

In order to be eligible for a reverse mortgage, there are no income or credit requirements. However, the lender will conduct a financial assessment to ensure the borrower has the financial capacity to continue to pay mandatory obligations, such as property taxes and homeowner’s insurance.

Once approved for a reverse mortgage, there are many benefits:

• The proceeds can be used in any manner you wish – whether to supplement retirement income or cover daily living expenses, repair or modify your home, pay for healthcare, etc.

• No loan payments are required while the reverse mortgage is still outstanding. The loan is repaid when you cease to occupy your home as a principal residence.

• You continue to own the home and title.

• You can always sell your home.

• The payout from a reverse mortgage can actually be used to buy a second home or refinance a reverse mortgage with a reverse mortgage.

For more information on reverse mortgages, click here to request a brochure. If you are interested in finding out if you can benefit from a reverse mortgage, contact Vincent J. Russo & Associates, P.C. today.