Why Now May be the Best Time to Qualify for a Reverse Mortgage Loan — Even if You Don’t Need the Funds Yet
For many retirees, home equity makes up a substantial part of their net worth. So why not use it to enhance your future financial situation?
A reverse mortgage loan, also known as a home equity conversion mortgage (HECM), can turn part of the equity you’ve built up in your home into funds that you can use today or a line of credit that’s there when you need it. If you meet the borrower requirements— like being age 62 or older and having a certain percentage of equity in your house — now may be the best time to qualify. Here are some points to consider:
Can you score a low interest rate? The economy has a huge effect on interest rates, and they are subject to change without notice. So, when rates start inching toward the lower end, you may want to lock one in before it’s too late. Over time, even a tenth of a percent can make a huge difference in how much interest accrues during the life of your loan.
Is it a seller’s market? In a seller’s market, the home-buying demand exceeds supply, giving sellers the upper hand. Look at the inventory and the number of homes for sale in your neighborhood. If available homes are scare, this could work in your favor, helping your home appraise for a higher amount. On the other hand, if the supply exceeds the demand, your property value could take a hit.
How secure is your credit? It’s no secret that higher scores and better credit history increase a lender’s confidence in your ability to make payments on time and in full. The closer your FICO score is to 850, the higher your borrowing power. Based on your debt situation and how often you use your cards, your score likely fluctuates from month to month. So, if you’ve been paying off a hefty amount of debt, you might see a consistent rise in your score, making it an ideal time to apply for a loan.
Remember, the early bird gets the worm
One of the best features about a reverse mortgage loan is that it’s not just for borrowers who need funds in hand immediately. An adjustable rate HECM line of credit offers all the benefits of a traditional Home Equity Line of Credit (HELOC) but gives you more control and flexibility over your money.
For example, you could choose to take the funds as lump sum, or instead receive monthly payments to supplement your retirement income.* Or, you could leave your line of credit alone. The unused portion of a flexible HECM line of credit grows over time — independent of home value.† The earlier you establish a reverse mortgage line of credit and the less you take out up front, the more funds you’ll have in the future. As long as you continue to meet your loan obligations, the lender cannot reduce or cancel your line of credit, so you can rest assured it will be there when you need it.
Are you financially prepared for the years ahead?
Don’t be left worrying if you saved enough during your working years to sustain you during retirement. Whether or not you feel like it’s a good time to take advantage of the equity you have in your home, you can gain tremendous peace of mind knowing it’s there when you need it. To learn more about a reverse mortgage loan from Reverse Mortgage Funding, LLC (RMF), reach out to us today at (888) 277-1567. We’ll schedule a convenient, in-person appointment with a loan specialist in your area to get all of your questions answered.
This content is sponsored by RMF, one of the nation’s leading reverse mortgage lenders. We are dedicated to helping older Americans retire more freely, in the comfort of their own homes. As a result of our commitment to providing an extraordinary and positive customer experience, we have earned a 98% customer satisfaction rating; a 4.7-star / Excellent score on Trustpilot; 4.8 out of 5 stars on LendingTree; and an A+ rating with the Better Business Bureau. Call 888-277-1567 to speak with a licensed reverse mortgage specialist to learn about our retirement financing products and solutions.
*Borrowers who elect a fixed rate loan will receive a single disbursement lump sum payment. Other payment options are available only for adjustable rate mortgages.
†If part of your loan is held in a line of credit upon which you may draw, then the unused portion of the line of credit will grow in size each month. The growth rate is equal to the sum of the interest rate plus the annual mortgage insurance premium rate being charged on your loan.
SEE WHAT FUNDS YOU MAY HAVE AVAILABLE
If you have equity in your home and believe you meet the eligibility requirements, a HECM may be the option that could help you retire smart.