www.FastandReliableCash.com A reverse mortgage is very different from other type of mortgage
loans. In other mortgage loans, the borrower pays money to the creditor
to acquire the ownership of a home but in the reverse mortgage the
creditor gives money to the consumer against the value of his or her
house. This economic plan is available to the senior citizens of United
States of America above the age of 62 who are now retired and want to
generate some income through which they can make their ends meet. After
the borrower of this loan dies, the house is sold and the payment of
loan is accomplished from it.
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One of the prime advantages to a reverse mortgage is that the money you withdraw is non-taxable. This allows senior citizens to add funds to their monthly budget without having to pay additional taxes which they would have to do if you chose to go back to work to get some extra money. Besides that, Social Security has a cap on the amount of money a retired person can make but since a reverse mortgage is not considered as an income but a loan; therefore it is exempt from being taxed.
There are several options the borrower is allowed to exercise when it comes to getting payments. You can receive monthly payments, a lump sum amount, a line of credit or a mixture of all three payment modes. The best part is that there is no limitation how the money is used. You can us it in any way you want as there are no conditions as to how the borrower uses the money. It can be used as a regular monthly income or used for paying emergency medical bills as long as the property is used as the primary residence of the borrower.
The only limitation on the borrower may be that they are denied withdrawal of full value of their equity. This also goes in their benefit as this can save them from overdrawing on the equity in the home and ending up owing more than the actual worth of their home.
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There are several options that a borrower can choose when opting for a reverse mortgage, which is why it is essential to first get counseling from a reliable financial advisor and understand the available options fully so that there are no issues and hidden clauses discovered later. Most HUD approved lending companies provide counseling so that there are no problems later.
One of the prime advantages to a reverse mortgage is that the money you withdraw is non-taxable. This allows senior citizens to add funds to their monthly budget without having to pay additional taxes which they would have to do if you chose to go back to work to get some extra money. Besides that, Social Security has a cap on the amount of money a retired person can make but since a reverse mortgage is not considered as an income but a loan; therefore it is exempt from being taxed.
There are several options the borrower is allowed to exercise when it comes to getting payments. You can receive monthly payments, a lump sum amount, a line of credit or a mixture of all three payment modes. The best part is that there is no limitation how the money is used. You can us it in any way you want as there are no conditions as to how the borrower uses the money. It can be used as a regular monthly income or used for paying emergency medical bills as long as the property is used as the primary residence of the borrower.
The only limitation on the borrower may be that they are denied withdrawal of full value of their equity. This also goes in their benefit as this can save them from overdrawing on the equity in the home and ending up owing more than the actual worth of their home.
There are several options that a borrower can choose when opting for a reverse mortgage, which is why it is essential to first get counseling from a reliable financial advisor and understand the available options fully so that there are no issues and hidden clauses discovered later. Most HUD approved lending companies provide counseling so that there are no problems later.