The Advantages of a HECM Reverse Mortgage for Shelter Island, NY Homeowners
For years, Senior Reverse Network, one of the leading Suffolk County reverse mortgage companies, has been helping Shelter Island, NY homeowners gain access to the funds they need to supplement their income and maximize their retirement. If you are nearing the age of retirement and you want to ensure that you have the financial stability you need during this momentous time in your life, a reverse mortgage loan may be able to help you do just that. The reverse mortgage lenders at Senior Reverse Network can help you determine if a reverse mortgage is the right option for you and guide you through the process of obtaining this unique type of loan.
The Benefits of a HECM Reverse Mortgage
A Home Equity Conversion Mortgage (HECM) is a reverse mortgage program offered by the Federal Housing Administration (FHA). With this type of loan, which is only available by FHA-approved reverse mortgage providers, you can access some of the equity in your Shelter Island, NY home.
If you own a single-family home, a 2-4 unit property and reside in one of the units, a HUD-approved condominium, or a manufactured home that meets all FHA requirements, you are at least 62 years of age, and own the property outright or only have a small portion of your mortgage remaining, a HECM reverse mortgage may be an option worth considering.
Here’s a look at some of the most top benefits of a HECM and why you might want to consider looking into this type of loan.
The Proceeds can be Used in a Variety of Ways
A HECM reverse mortgage is a versatile financial tool that you can use in numerous ways; there are no restrictions on this type of loan. Examples of some of the ways that you can use the proceeds you will receive from this type of loan include:
- Paying off the remaining balance on your “forward” mortgage to minimize your monthly expenses.
- Re-model your Shelter Island, NY home to accommodate your needs and increase your comfort as you age.
- Cover the cost of other monthly expenses, such as credit cards, car payments, and other types of loans.
- Maintain a line of credit that will continue to grow and that you can use to cover unexpected costs, such as health care needs, home repairs, car repairs, and other emergencies.
- Cover the cost of your children’s or grandchildren’s college education.
- Purchase a secondary residence.
- Pay for a dream vacation.
- Cover the costs of any long-term care that you may require, such as a home health aide.
- Fund an inheritance for your loved ones.
- Put off collecting your Social Security benefit until it reaches maturity and maxes at when you turn 70.
In other words, with a HECM, you will have access to the funds you need when you need them and can use them in any way that you wish.
No Monthly Payments
Unlike a “forward” mortgage, which has to be paid on a monthly basis until the loan is paid off in full, and payments commence as soon as you go to closing, monthly payments are not required for a HECM reverse mortgage. The balance of the loan is due when you sell your home, when you permanently move from the home into another primary residence, or when the last borrower on the loan leaves the home. However, do note that you will have to pay other ongoing fees that are associated with your Shelter Island, NY property, such as homeowner’s insurance, property taxes, and home maintenance; nevertheless, since you don’t have to make any monthly payments on this type of loan – and because you can use the funds to pay off the remaining balance on your forward mortgage (if you still have one) – with a reverse mortgage loan, you can stand to save a tremendous amount of money.
You will Remain the Owner of Your Residence
Many Suffolk County homeowners assume that reverse mortgage lenders take ownership of the properties that they approve reverse mortgages for. That’s a common misconception; in reality, when you take out this type of loan, you will continue to be the owner of your Shelter Island, NY home.
The Loan is Insured
A HECM is a reverse mortgage that is backed by the Federal Housing Administration (FHA). That means that if property values decrease and you owe more on your loan when it comes due, the federal government will make up the difference. As such, only the proceeds that your home sells for will be used to pay off the loan, nothing more.
There are Several Disbursement Options to Choose From
The proceeds from a reverse mortgage can be disbursed in a number of ways, and you get to choose how you receive the funds. You can choose to receive a lump-sum payment, a line of credit, monthly payments, or a combination of any of these three options. Since there are different disbursement options and you can decide which option to choose, you can customize a reverse mortgage to meet your unique financial needs.
You Can’t Lose Your Home
A home equity loan is similar to a reverse mortgage in that both loans will allow you to access the equity that you have built-in your Shelter Island, NY home. However, with a home equity loan, if you were to miss payments and default on the loan, there is a chance that your home could end up in foreclosure. With a reverse mortgage loan, if you miss payments, your home cannot be taken from you, as payments for the loan aren’t due until your home is no longer your principal residence.
Eligibility Isn’t Based Solely on Your Income or Credit Score
The eligibility requirements for a HECM aren’t as stringent as the requirements for a standard forward mortgage. The income and credit score requirements for this type of loan are minimal, as eligibility is based on your age, the amount you owe on your home, the equity you have built on your property, and that you are not delinquent on any other federal debt. Because the requirements aren’t as strict, there is a very good chance that you will be eligible and approved for a reverse mortgage.
Contact Senior Reverse Network for Your Suffolk County Reverse Mortgage Needs
The above are just some of the benefits of a reverse mortgage. If you would like to learn more about this unique financial tool and think that it would be a valuable way to help you plan your retirement, contact one of the most trusted reverse mortgage providers in Suffolk County: Senior Reverse Network. Call 800-985-7383 or visit www.srnreverse.com to schedule an appointment to speak with one of our helpful associates. At Senior Reverse Network, we look forward to helping you make the most out of your retirement.
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