Retirement is all about you finally having the time to do everything you have ever wanted. A charming sentiment. But if you don’t have funds to finance those activities, all your dreams for a wonderful retirement can go out the window pretty quickly. As a retiree, though, you can access those much-needed funds through a reverse mortgage loan.
Definition
A type of mortgage that allows you to convert a portion of your home equity into cash, a reverse mortgage loan is different from other types of loans because it doesn’t require a credit check. In other words, it means that regardless of your credit standing, you can qualify for the loan. That’s especially handy, given how strict most lending companies are when it comes to loans.
Credit Options
You don’t need credit checks because there’s no loan to pay for. The lending company sends you the money, instead of you making payments to the lender. You can opt for a lump-sum payout or a credit line that you can use only when you need you need to. Monthly cash advances are also another option, as it is a combination of all three.
Loan Basics
You don’t have to pay for the loan for as long as you live in the home tied to the loan and are current on your payments. If you default on your property taxes, insurance bills, and homeowner’s bills, though, that could compromise the agreement and leave you vulnerable to a foreclosure. Therefore, you need to be fully aware of the risks you take on when you look for a lending company.
Getting One
Be sure to ask around and compare reverse mortgage quotes carefully, along with any other inclusions or services the lending companies offer. Don’t go with the first one you find. By weighing your options, you can find the loan that’s right for your retirement needs and wallet.
