Senior citizenry guarantees no income but lots of financial needs at your disposal. However, you can benefit from the reverse mortgage program if you are a homeowner. This initiative by the Federal Housing Administration promises you steady income in old age. You get a loan on your home. If you decide to apply for the program, it is wise that you weigh the pros cons reverse mortgage has to offer.
It is very easy to qualify for this program since you do not need to prove your income and credit worthiness. All is required of you is your age, which should be above 62 years. Being older gives you better chances of receiving a high loan amount. You or your spouse must also live in the house for at least 183 days in a year.
In addition, the loan is accorded to you as a lump sum or as monthly income. Whatever the case, you will not make any monthly payments until your demise or sale of your home. Similarly, you will not pay back an amount higher than your home value. Your heirs too will not pay more than the value of your home, which they will inherit in case of your death.
The downside of this kind of loan is that you will continue to pay mortgage insurance, land rates, home repairs and maintenance on your own. Furthermore, it could get in the way of qualifying for other federal programs such as Medicaid. The closing costs are also more expensive than the typical mortgage.
All in all, seeking counseling from a Housing and Urban Development advisor would be your best bet in determining if you need a reverse mortgage or not.