Due to the economic recession, a lot of homeowners are finding themselves in harsh financial difficulties. This happens even for those who may have already paid off their entire mortgage. So what are some viable options to help you live in financial comfort if you do not want to sell your home and do not want to take out a traditional home equity loan?
If you hold a substantial amount of equity in your home and are the age of 62 years or older, there is a possibility that you tap into that equity through a reverse mortgage to make you and your family more financially comfortable. A reverse mortgage essentially allows you to take out a loan against your home without making any repayments. There are very minimal eligibility requirements and neither your credit rating nor your income has any effect on your eligibility. For many seniors, this is the easiest way of exchanging the equity in their home for cash. The amount of funds that you can obtain from your home’s equity is calculated as a lump sum of money. However, you do not necessarily have to take the loan as a lump sum as there are other options available. You can choose to receive it as an up-front lump sum, as regular monthly payments, or as a credit card-style account where you draw money as you need it.
When comparing mortgage rates offered between different lenders, use a mortgage calculator to help you to arrive at your decision. You can easily find a mortgage calculator online and all you have to do is key in your home value, zip code, loan amount and age. The calculator will help determine the rates based on your details submitted. Alternately, you can consult a professional to find out more.