A lot of homeowners are approaching the age of retirement in Bergen County NJ and are finding they can't be financially secure with the amount of money they have saved. They might have had unexpected medical expenses, or maybe they had a significant drop in their 401K's or IRA accounts during the financial crisis. A reverse mortgage may offer people in this type of scenario assistance by letting them make use of their home equity.
The Types of Reverse Mortgage Options Available in Bergen County NJ
Depending on their circumstances and needs, homeowners who are 62 and older may have the chance to selecting from these types of reverse mortgages:
* Single purpose reverse mortgages are offered by nonprofit agencies, as well as state and local governments. This type of reverse mortgage is intended to serve the needs of low to moderate-income seniors who are in need of money to take care of a specific expense, including major home repairs or property taxes. Although only a limited amount of funds can be accessed using this type of reverse mortgage to the homeowner, the costs associated with the mortgage are usually substantially less than the other types of reverse mortgages.
*Home Equity Conversion Mortgages (HECM) are federally insured reverse mortgages administered by the Department of Housing and Urban Development. The homeowner must speak to an authorized housing counselor, however, before applying for this kind of mortgage. The fees and costs of the loan will be reviewed with the prospective borrower by the counselor on top of exploring other funding options which may be available.
* Homeowners with high value homes with a substantial amount of equity can take advantage of proprietary reverse mortgages, that are obtainable through private lenders.
The amount an individual or couple can borrow is determined by age of the homeowners, the amount of equity in the home, and the type of mortgage they choose. Once a homeowner is approved for a HECM or proprietary reverse mortgage, they can choose to get their payments in a lump sum, on a term basis, or on a tenure plan. These payments are tax-free and do not affect Social Security or Medicare payments.
The Types of Reverse Mortgage Options Available in Bergen County NJ
Depending on their circumstances and needs, homeowners who are 62 and older may have the chance to selecting from these types of reverse mortgages:
* Single purpose reverse mortgages are offered by nonprofit agencies, as well as state and local governments. This type of reverse mortgage is intended to serve the needs of low to moderate-income seniors who are in need of money to take care of a specific expense, including major home repairs or property taxes. Although only a limited amount of funds can be accessed using this type of reverse mortgage to the homeowner, the costs associated with the mortgage are usually substantially less than the other types of reverse mortgages.
*Home Equity Conversion Mortgages (HECM) are federally insured reverse mortgages administered by the Department of Housing and Urban Development. The homeowner must speak to an authorized housing counselor, however, before applying for this kind of mortgage. The fees and costs of the loan will be reviewed with the prospective borrower by the counselor on top of exploring other funding options which may be available.
* Homeowners with high value homes with a substantial amount of equity can take advantage of proprietary reverse mortgages, that are obtainable through private lenders.
The amount an individual or couple can borrow is determined by age of the homeowners, the amount of equity in the home, and the type of mortgage they choose. Once a homeowner is approved for a HECM or proprietary reverse mortgage, they can choose to get their payments in a lump sum, on a term basis, or on a tenure plan. These payments are tax-free and do not affect Social Security or Medicare payments.
About the Author:
Erick Brucker is a blogger on topics related to mortgage choices for homeowners. Click here to learn more!
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