Most people would hope that by the time they retire they would have put away enough in savings to maintain at least a similar lifestyle as their working years. In reality however, very few seniors find themselves in this position. With programs like a reverse mortgage, living on a fixed income can be supplemented using a home's equity.
Unlike traditional mortgages which have become difficult to qualify for, the government insured reverse mortgage program HECM, does not require having as high an income or a minimum credit score to qualify for. Rather, it is based on at least one borrower being 62 or older and having sufficient equity in their home. By satisfying both of these qualifications and maintaining the property as well as paying all property taxes and insurance, retirees can eliminate their monthly mortgage payments.
Additionally, they can use their home equity to receive payments in the form of a lump sum, line of credit or monthly payments. This can help seniors have a more comfortable retirement and peace of mind.
Meanwhile, conventional mortgage rates are near all-time lows. Conforming no-point 30-year fixed mortgage rates average 3.375 percent while the 15-year rate is near 2.625 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.