At the beginning of the last year (2013), a survey took place among around 2000 senior people (over 60 years of age) in Florida and a formidable truth was revealed from the report that more than 60% of the people were worried about the unplanned expenses that might appear at any point in their lives. There is no denying to the fact that after retirement, you are left with limited money and no monthly earning and in such circumstance, if any unexpected expense appears in your life, you may get puzzled to manage that. Why not ensure a monthly income plan that can provide you with a decent earning after retirement as well?
If you own a house, you have a very good opportunity to use its equity to through reverse mortgage and earn monthly payment after a certain age. If you are not quite familiar with the subject, you must want to have some clear details about it. You have landed to the right place to acquire some knowledge about what is Florida Reverse Mortgages and how that can help you to manage those unexpected expenses.
It will not be right if I only say that it is one among the financial products offered by an insurance company in Florida. There are lots still left to be mentioned. Unlike the lots of financial products, it is backed by the Federal Housing Administration (FHA), a department of the Federal Government and the prime motto of this plan is to help the seniors with some additional source of income after their retirement.
Reverse mortgage allows you to utilize your home’s equity as collateral and earn a monthly income. The loan amount is basically the percentage of the value of your property and that is determined by the age of the youngest member of the house, among the other criteria. The loan amount is not due until the last youngest member depart the house or passes away. When this situation finally comes, the estate is given 6 months time to pay the balance or sell off the house and pay off the balance. The remaining equity then be inherited by the by the estate and it will under no circumstance, remain liable if the house is sold at less than the balance of the mortgage.
There are few eligibility measurements for your house to be selected for FHA insured reverse mortgage. The owner of the house must be over the age of 62 years. The property should either be owned free or should have a mortgage balance which is not more than 65% of the home’s value. Generally all types of homes are eligible for reverse mortgage but, they should be built within the last 30 years. The land must be owned and FHA approved. If these aspects are OK then the income is distributed through the following means:
- Lump sum cash at the closing.
- A monthly payment as long as the owner lives in the home.
- Monthly payments for a fixed number of years.
- Draw any amount at any time until it is finished.
I hope this brief insight about the reverse mortgage will help you plan your after retirement life properly.