How a Reverse Mortgage Distinguish From a Conventional Mortgage?

A reverse mortgage is a loan which permits the owners of a property to use a part of their home’s equity with no monthly “mortgage” payment. A reverse mortgage is only accessible to those seniors that are aged 62 or older. This makes it ideal for seniors that are on a fixed income, that may be struggling to pay their bills or medical care not covered by their hospital plan, or just want to stretch their retirement income.

How a Reverse Mortgage Hawaii Differs from a Conventional (Forward) Mortgage

A reverse mortgage is not like a conventional mortgage. With a conventional mortgage the homeowner is expected to pay the bank or finance company a monthly payment to eventually extinguish the mortgage; however, with a reverse mortgage the finance company or bank pays the homeowner a monthly sum of cash. Although, some people often opt for a lump sum of cash, a line of credit or a combination rather than “receive” monthly payments.

Must Read : Is a Reverse Mortgage Safe?

Tax Free Cash when you need it most

The cash receive (regardless of the method) are free from immediate tax liability, and there are no restrictions on how a person can use the money once they have received it. Some of the more common uses for the money, apart from paying for medical treatment, include home improvements, paying off other debts, visiting the grandchildren or and even for a new car or vacation.

Funding your Retirement Years

With people living to be much older, some seniors are making use of a reverse mortgage to help extend their retirement funds. By making use of the monthly payment option, the income received from a reverse mortgage is like having a second income. This is handy, as it stops the homeowner from having to use their own cash to pay for bills and other debts they might have, such as a new refrigerator. You could even opt to put the money in to a high interest savings account, so that you have an emergency cash fund should you ever need it.

In Conclusion

One of the main benefits of a reverse mortgage Honolulu is the fact that it allows you to get some much needed cash, whilst allowing you to remain in your home without the threat of foreclosure. There is no need to make monthly repayments, and the money for the loan is only repayable once the homeowner passes on, or sells the home. Home maintenance, property taxes and homeowners insurance are still required to be paid by the homeowner.

Read More : Top 6 Things Every Family Member Should Know about Reverse Mortgage

For more information and for a Free, No-Obligation quote, contact Daniel Nicolosi at Harbor Financial Group – Your Aloha Mortgage Solution. You can reach him directly at (808) 945-3000 on Oahu; or Toll Free at 888-532-5642 from the Outer Islands.