As many homeowners in Bergen County NJ approach their retirement years, they see they can't be financially secure with the amount of money they have saved. There could be different explanations for this fact. One could be a considerable loss in their 401K's or IRA accounts because of the recession. Another could be unpredicted medical expenditures. A reverse mortgage might help people in these kinds of situations by letting them tap into their home equity.
Mortgages Options Available For Bergen County NJ Homeowners
Depending on their circumstances and needs, homeowners that are 62 and older may have the option of selecting from these types of reverse mortgages:
* Single purpose reverse mortgages can be provided by nonprofit agencies, as well as local and state governments. Seniors on the lower side of the income spectrum that need money to cover certain expenses, including property taxes or major home repairs, can make use of this type of reverse mortgage. Despite the fact that the homeowner is limited to a set amount of funds through this type of reverse mortgage, this type is however much easier and less costly to obtain compared to other types of reverse mortgages.
*Home Equity Conversion Mortgages (HECM) are federally insured reverse mortgages administered by the Department of Housing and Urban Development. The homeowner must meet with an approved housing counselor, however, before applying for this mortgage type. The counselor will review the fees and costs of the loan with the prospective borrower, on top of looking into other available funding options.
* Proprietary reverse mortgages are available through individual lenders and are suitable for homeowners who have high value homes with a substantial amount of equity.
Several factors determine how much an individual can borrow. These factors are the age of the homeowner, the type of mortgage chosen, and the amount of equity in the home. A homeowner can choose to get the payments all at once, on a term basis, or on a tenure plan once approved for a HECM or proprietary reverse mortgage. These payments are tax-free and do not affect Social Security or Medicare payments.
Mortgages Options Available For Bergen County NJ Homeowners
Depending on their circumstances and needs, homeowners that are 62 and older may have the option of selecting from these types of reverse mortgages:
* Single purpose reverse mortgages can be provided by nonprofit agencies, as well as local and state governments. Seniors on the lower side of the income spectrum that need money to cover certain expenses, including property taxes or major home repairs, can make use of this type of reverse mortgage. Despite the fact that the homeowner is limited to a set amount of funds through this type of reverse mortgage, this type is however much easier and less costly to obtain compared to other types of reverse mortgages.
*Home Equity Conversion Mortgages (HECM) are federally insured reverse mortgages administered by the Department of Housing and Urban Development. The homeowner must meet with an approved housing counselor, however, before applying for this mortgage type. The counselor will review the fees and costs of the loan with the prospective borrower, on top of looking into other available funding options.
* Proprietary reverse mortgages are available through individual lenders and are suitable for homeowners who have high value homes with a substantial amount of equity.
Several factors determine how much an individual can borrow. These factors are the age of the homeowner, the type of mortgage chosen, and the amount of equity in the home. A homeowner can choose to get the payments all at once, on a term basis, or on a tenure plan once approved for a HECM or proprietary reverse mortgage. These payments are tax-free and do not affect Social Security or Medicare payments.
About the Author:
Eric Brucker is an expert in the field of mortgage options in Bergen County NJ. Click here to visit a recommended mortgage broker!
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