With a fixed source of income (or even no income) and rising living expenses, it has become difficult for some seniors in Arizona to pay for their necessities. With the help of a reverse mortgage, seniors will not only be able to pay off any bills, but they will also regain financial independence.
WHAT ARE REVERSE MORTGAGES?
A reverse mortgage is when the equity value of the house is converted into cash. This cash is paid to the borrower in the form of a loan. It is called a “reverse mortgage” because instead of you paying the lender monthly mortgage payments, the lender pays you to live and own your home. The homeowner only needs to pay back the loan when he/she leaves the property, or fails to pay for property taxes or homeowner insurance.
Arizonians are rapidly realizing the benefits of a reverse mortgage and are now using it to their advantage to pay off debts or even take that vacation that they have always dreamed of.
PROS AND CONS
Pros of reverse mortgages in Arizona:
- Own your home: With a reverse mortgage, you own your home, not the lender.
- No income or credit requirements: Income and credit will not impact your ability to qualify. So if you have bad credit, no credit, or even no income, you should still apply for the loan.
- Tax-Free Income: One of the biggest advantages of a reverse mortgage, you will not be taxed on the money the lender pays you.
Cons of reverse mortgages in Arizona are:
- Fees: There are a handful of fees that the borrower needs to pay associated with the loan. The good news is that the fees are usually wrapped up in the loan, which means your home’s equity will cover these charges.
- Compound interest: For most of the reverse mortgages, interest on the loan compounds.
