For seniors who have equity built up in their home, they might have heard about something called a reverse mortgage. There are plenty of TV commercials for reverse mortgages; however, there is still a lot of confusion regarding what they are.
Simply put, many seniors have already paid off their homes completely. With a reverse mortgage, people can access the equity they have in their home and use this as a quick source of cash. Then, they can pay back this loan when they can without giving up ownership of their home. Who should use this tool? There are a few reasons to note.
A Quick Source Of Cash Without Great Credit
For those who don’t have a strong credit score but need a quick source of cash, a reverse mortgage might be a great option. Many people stop paying attention to their credit score in their later years, thinking they will not need to take out a loan again; however, life can throw surprises at people and a reverse mortgage can help people access cash quickly without having to apply for a formal loan.
A Flexible Source Of Money
There are many people who think that a reverse mortgage can only be used for housing expenses. This is not the case. In reality, people can use a reverse mortgage to pay for just about anything. One of the most common uses of a reverse mortgage is to cover medical bills. Medical bills are among the most common unexpected expenses and if a medical bill comes up, then a reverse mortgage can be used to pay it off.
A Loan With Flexible Repayment Terms
Finally, a reverse mortgage is a loan that provides flexible repayment terms. With a reverse mortgage, there is no need to pay the loan off in full until the home is sold, the owners move out, or the owners pass away. In this case, when the home is sold, some of the money is used to pay back the reverse mortgage.
Consider A Reverse Mortgage
For some people, a reverse mortgage can be an effective financial tool. It is critical for everyone to evaluate all of their financial options and choose the one that is right for them.
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About the Author:
Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.