A REVERSE MORTGAGE MAY NOT BE FOR YOU

Reverse mortgages are loans that are available to homeowners 62 and over, which allows the retiree to convert a portion of their home equity into liquid cash.

The reverse mortgage is a product that was conceived to help retirees who have limited income and resources use their accumulated equity in their home to live a more comfortable life without having to sell the family home. The proceeds can be used to remodel, take a vacation, visit the grandkids, pay medical expenses, or consolidate credit cards. There are no restriction on how one can use the proceeds from a Hawaii reverse mortgage.

The reason it is called a “reverse” mortgage is that rather than making monthly payments, which would lower your balance, no mortgage payment is required, therefore the mortgage balance is going up. There are a number of different options for receiving cash. One could choose to “receive” a monthly payment from the bank, take a lump sum, or a combination of the first two.

Who Should Not Take Out a Hawaii Reverse Mortgage?

When shopping for a reverse mortgage, Hawaii residents will find that although in most cases a reverse mortgage can be a lifesaver, there are some scenarios a reverse mortgage may not be a the right decision for you:

  1. Heirs Financial Situation

If you have someone living with you that is not 62 or over and therefore are not eligible to be part of the reverse mortgage, they would be required to (at the time of your death) either refinance the home into their name or sell the family home. If they can’t qualify for a loan, they would be forced to sell. Any remaining equity after the reverse mortgage balance is paid off would, of course, be theirs to keep. In the unlikely event that more is owed on the home than the current appraised value, the FHA insurance would pay the shortfall. That means your heirs wouldn’t owe any money, however they wouldn’t receive any money either. Again, if there is equity remaining, it would go to the heirs.

  1. If You Aren’t Planning On Staying In Your Home Long Term

If, for example, you plan on relocating within the next few years, or even months, do not apply for this loan as you would not recoup your closing costs. The reverse mortgage is intended for people who want to stay in the safety and security of their family home.

  1. Taxes, Insurance and Property Maintenance

If you considering a reverse mortgage because you recently retired on a low income, even paying taxes and insurance may be difficult for you. If that is the case, then upkeep may also be difficult. In this scenario it might be better to sell and downsize. You actually may be able to “buy” as a reverse mortgage using the equity you received from the sale of your home and be mortgage free.

In conclusion, to find out if a Reverse Mortgage is or isn’t right for you, consult the author of this article or your financial advisor to discuss the pros and cons. For more information you can also visit: www.AlohaMortgageSolutions.com. There you will find 2 short video’s, one explaining reverse mortgages and the other, testimonials of real Hawaii Clients.

For a FREE, no-obligation quote, contact Daniel Nicolosi at Harbor Financial Group – Your Aloha Mortgage Solution in Honolulu. You can reach him directly at (808) 799-8218 on Oahu; or Toll Free at 888-423-2468 from the Neighbor Islands.

“YOU’VE INVESTED A LIFETIME, NOW REAP THE REWARDS!”

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