Owning a home might be one of your long-standing dreams, and your struggles might have paid off at the end of your work career. However, if you couldn’t save enough for your retirement, you must be considering different options right now to fund your retirement. And, if you are thinking of securing a reverse annuity mortgage, here we have everything you need to know.
What Is A Reverse Annuity Mortgage?
A reverse annuity mortgage loan is a type of home loan that is obtained against your home’s value. With this type of loan, you can cash in the equity of your home partially while making sure that you do not have to move out or sell your property.
How does It work?
Generally, the homeowners who are 55 years of age or older can take the Income Advantage or Reverse Annuity Mortgage loan. The amount of loan you get depends on your home’s value against which you are securing the loan, your age, the location of the property, and the number of loans or mortgages you might have already secured against that home.
The loan is generally split into a couple of parts. First, there is a lump sum minimum amount that you get as soon as the loan is approved. Besides, there is a secondary amount from which you can draw payments at regular intervals.
It’s you who decides the amount to be received (depending on the minimum and maximum limits). Besides, you also make the call on how frequently you get these payments i.e. monthly, quarterly, or annually.
How Flexible Are Reverse Annuity Mortgages?
This type of loan is relatively more flexible compared to other types of reverse mortgages. It’s just like a credit line where you get a minimum of $1000 every month but can also increase that amount as per your needs.
What makes these loans even more flexible is that you can start or stop getting payments whenever you like and can also pay a certain lump sum each year. The interest is applied only to the amount that you have actually borrowed each month, and not the complete amount of the approved loan.
Who Should Take Reverse Annuity Mortgages?
This type of mortgage could be a great choice to supplement one’s retirement income. If one believes that they haven’t been able to save enough money when they were on job and their pensions are not enough to provide for their monthly necessities, this type of mortgage can be a good way to supplement one’s monthly income.
This Income Advantage loan can actually help a lot of people in different situations and can be a solution to their financial worries. This extra income can be used for:
- Increasing one’s month-to-month cash flow
- Paying for any general home maintenance jobs
- Paying one’s monthly loan installments and bills
- Maintaining or improving one’s lifestyle
- Taking regular vacations or a bucket list trip
- Enjoying one’s dream retirement life
So, if you are living in a home that’s appreciating in value constantly, you should consider getting an Income Advantage loan. This type of mortgage can help you cash in on your home’s increasing equity and use part of it as your tax-free, regular income.
For more information on a reverse annuity mortgage visit blakemortgage.com and get in touch with the best Real Estate agents.