For the elderly aged 62 years and above, a reverse mortgage can be a lifesaver—a source of funds to cover a senior’s living expenses. A reverse mortgage is one of the easiest ways to get a hefty sum of money. However, it doesn’t come without a cost. In fact, getting a mortgage like this is tricky and even more expensive than other loans. But, when done right, your reverse mortgage loan can be worth it.
If you have finally made up your mind regarding your mortgage application, below are some reverse mortgage tips that you can observe to maximize your loan.
Do not leave your current residence
With the current pandemic situation, this one is easy.
Stay at home.
The key to maximizing a reverse mortgage Bergen County application is to stay at your current residence or the house being subjected to the reverse mortgage. And that applies with or without the Corona Virus Disease. When you avail of a reverse mortgage, you get to keep the title of your place. Hence, you will still be responsible for paying your property taxes and insurance costs on time.
However, if you’re not at home for more than half of the year due to non-medical reasons, your property may be subject to foreclosure. The same is the case if you’re away from your place within 12 consecutive months because of healthcare-related concerns.
Consider options for paying property taxes and insurance premiums
While there are no payments due on your mortgage, you are still responsible for paying your property taxes and insurance premiums. Ask your lender or your broker regarding options for paying property taxes and insurance premiums. Usually, they may provide you with the following options:
- You pay your homeowner’s insurance and property taxes directly to the insurance provider and tax authority
- You make direct payments on your insurance and property taxes as usual, but you shall set aside a portion of your loan to cover those dues
- A reverse mortgage Bergen County lender takes care of paying your premiums and taxes by charging it from the loan proceeds in a set-aside account (see LESA)
If you’re prone to forgetting regular payment schedules, the last option above may work for you.
Do not splurge and spend on non-necessities
Get a reverse mortgage only when you need it. Signing up for this kind of mortgage may entail costs. As much as possible, use the loan proceeds to cover medical fees or significant life expenses. Likewise, the outstanding balance and other mortgage costs will be shouldered by your estate later. So, you might want to consider the impact of your mortgage as well.
Ensure that your reverse mortgage will not affect your eligibility to government assistance programs
Your reverse mortgage will not affect your eligibility for Medicare and Social Security benefits. However, once you get the proceeds of your reverse mortgage, you might not be eligible for other government assistance programs that cater to the elderly.
For instance, you should verify with your reverse mortgage Bergen County broker whether you are still covered by Medicaid and Supplementary Security Income (SSI) since such elderly assistance programs require a minimum amount of liquid assets.
Considering you’ll receive a massive sum as your mortgage proceeds, your reverse mortgage application may affect your liquidity and disqualify you from the above government assistance programs.
Beware of Scams
Fraudsters often target senior homeowners. That’s why being informed regarding scams surrounding your mortgage is probably one of the most practical reverse mortgage tips you can ever observe.
For instance, there might be contractors who will ask you to get a reverse mortgage for home repairs when you can get alternative loans for it. Likewise, beware of financial advisors who’ll ask you to get a reverse mortgage for a financial product, insurance, or investment. While it’s true that you might need these products, a reverse mortgage is probably not the best choice to carry forward.
There are other reverse mortgage scams out there. To avoid being a fraud victim, we highly recommend that you seek assistance from trusted reverse mortgage Bergen County institutions and brokers who have a proven track record in the industry, such as Cornerstone Capital.
Be mindful of your loan documents
Read your loan documents thoroughly. If possible, ask for a lawyer or a third person to review the loan paper’s provisions and stipulations for you. Also, do not sign blank spaces or documents. Do not even give a Power of Attorney (POA) to people you don’t trust. A POA can enable a third party to act on your behalf. So, make sure you’ll going to issue it to someone trust-worthy.
Trust Your Instincts
Use the wisdom you have acquired over the years when making a reverse mortgage application. If it doesn’t feel right to you or you have reservations, don’t push it.
Trust your instincts.
Besides, there are other mortgage financing schemes that you might qualify for, and a reverse mortgage is not the only way to raise funds for your financial needs. A reverse mortgage can be costly, so take your time to decide and contemplate on whether this loan is right for you.
The MOST Important Reverse Mortgage Tip: Look for Reliable Reverse Mortgage Partners
Finally, on top of the reverse mortgage tips above, we highly recommend that you look for reliable mortgage partners who are not just after the deal but also your well-being. Ask around for feedback on the best mortgage providers in town. However, if you don’t want to trouble yourself much, you might want to skip this part and let your trustworthy reverse mortgage Bergen County broker help you.
Cornerstone Capital Financial Services has helped individuals and families obtain mortgage financing in Bergen County for the past 15 years. Let us help you assess what kind of reverse mortgage is for you and whether this type of loan fits your needs.
Contact us now, and let’s talk about how we can help you.