Can I make payments on a reverse mortgage?
Introduction:
Can You Make Payments on a Reverse Mortgage?
The simple answer is yes, you can choose to make payments on a reverse mortgage. However, it’s important to note that making mortgage payments on a reverse mortgage is not a requirement. Homeowners must maintain their property in good condition and stay current on property taxes, insurance, and HOA fees, but monthly mortgage payments are optional.
Why Consider Making Payments?
Choosing to make payments on your reverse mortgage can be a strategic financial decision. It helps in keeping the loan balance lower, which can be beneficial in the long term. This flexibility allows you to manage your finances more effectively, especially in retirement. Making payments on the adjustable rate program also increases your line of credit by the same amount of your payment. Your line of credit has a growth rate of the note rate + .5%. It is also essential to note, you are only charged interest of funds that are used- not funds in your line of credit. Making payments on the fixed rate are not later available but do reduce your loan balance.
Understanding Different Mortgage Types:
It’s essential to understand the nuances between different types of reverse mortgages. For instance, with a fixed-rate, closed-end loan, once you repay the loan, those funds are not available again. On the other hand, with an adjustable-rate loan, the amount you pay can become available again. This means if you repay a portion of your loan, say $5,000, that amount is accessible once more in your line of credit.
The Growth Rate of Your Line of Credit:
Another aspect to consider is the growth rate of your line of credit. Currently, the growth rate typically includes the note rate plus half a percent. This growth rate is an important factor to consider when planning your financial future.
Let Us Help You:
If you have further questions or need more detailed information, we’re here to assist. Simply email us at info@ventanahomeloans.com.
Conclusion:
We hope this blog has shed light on the flexibility and options available with reverse mortgages. At Ventana Home Loans, we’re committed to helping you make informed decisions about your home financing options. Join us again next Monday for more insights, and don’t hesitate to get in touch for personalized advice.
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Yes, we'll need to know if the spouse/partner is mentally competent and if they can still handle their financial affairs. If the spouse/partner can no longer handle their financial affairs we will need either a POA (Power of Attorney), Conservatorship or Guardianship to ensure the safety of the spouse/partner.
*Note not all POA's(Power of Attorney) provide the ability for the POA to handle financial affairs including refinancing of a home.
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