Reverse Mortgages: No Monthly Payments
Another way to save money each month is to consider taking out a reverse mortgage on your home. A reverse mortgage is a home loan based upon the equity that's accrued on your home. Rather than borrow money which is paid back as soon as it hits your bank account, money gained through a reverse mortgage doesn't need to be repaid until you no longer live at your home. Basically, this means no payments until you move, sell your home or die. Many Americans are researching reverse mortgages as a way to cope with the nation's ailing economy.
Not everyone is qualified to receive a reverse mortgage. Applicants must own their homes outright, and they must be at least 62 years old. Applicants may also be considered if they've paid off most of what they owe on their homes. Homeowners who are considering this action should speak with a financial counselor or a real estate agent before making any decisions. Agreeing to a reverse mortgage is a long-term commitment, and possibly a lifetime commitment. You should carefully consider your options especially if you have children or grandchildren who might benefit from taking control of your home after you're gone.
Reverse Mortgage Cash
Homeowners who agree to a reverse mortgage can choose how they would like to be paid. One option is to take a single lump-sum payment; this option is often used by people who are trying to pay off vehicles, medical bills or other large expenses. Others opt to receive payments on a monthly basis for a fixed amount of time, depending on the size of the loan and the payment amounts. The last option involves receiving a line of credit, or a credit line in conjunction with monthly cash payments. Reverse mortgages give borrowers the flexibility to be paid in a way that best suits their needs. Best of all, that money doesn't need to be repaid as long as the borrower continues to live in his or her home and stay current on paying taxes.
Mortgage Refinancing Eligibility
Qualifying for mortgage refinancing is much easier than qualifying for a reverse mortgage. There's no age requirement for mortgage refinancing, and the amount you owe on your home isn't as big of a factor because you're not borrowing against your equity. When seeking a mortgage refinancing loan, banks and lending companies will examine your credit score, your income and your outstanding debts to determine a loan amount and pay structure that realistically suits your needs. As with reverse mortgages, it never hurts to seek advice from a financial counselor before committing to refinancing your mortgage.
That said, now is a great time to optimize your monthly mortgage payments. The economic recession has leveled off, and eventually interest rates will begin rising again. It's unlikely the conditions for refinancing will be this good again anytime in the foreseeable future. If you want to lower your mortgage payments, start learning about mortgage refinancing today.
