Articles - Archived Expert Advice
(Copy and paste the text into your document)Reverse Mortgages
I am a 67-year-old retiree living on Social Security. I am considering a reverse mortgage from my Credit Union to generate more income. Is this a good option?
It may be. A reverse mortgage allows homeowners age 62 and older to convert a good portion of equity in their primary residence into tax-free income.
You must own your home or have relatively little debt against it; otherwise some of the proceeds will be used to pay off existing liens. A reverse mortgage is not repaid until you sell the home, decide to move or die, after which the lender is repaid all of the principal and interest. You are responsible for home repairs, property taxes and homeowner's insurance.
Borrowers can receive money in a lump sum or monthly payments. Since there are no restrictions on how the money can be used, many use it for medical or living expenses, travel or home renovations.
The amount of money you are eligible to receive depends on your age (or the age of the youngest borrower), current rates and the home's appraised value. Generally, lenders will allow you to borrow 80 percent of the appraised value.
If you think a reverse mortgage may be for you, note that in North Carolina you are required talk to a certified housing counselor before applying. Once you are ready
to apply, it's good idea to contact several lenders, as fees will vary.Consider Local Government Federal Credit Union as a good place to start. We offer a competitive product with low origination fees and responsible terms. Contact the Call Center at 888.732.8562 and speak with a representative from the mortgage department. They will be happy to assist you.
