Is Single-Purpose Reverse Mortgage Suits For You
This kind of mortgage is not as common as the two reverse mortgages, it is also known as a property-tax deferral program. It is an agreement that is normally offered by nonprofit organizations and state and local government agencies.
The single-purpose loan allows the homeowners to access part of their home’s equity to pay for a lender-approved expense. It only means that the borrowers can only use the loan to cover one specific purpose, typically property taxes or necessary home repairs.
Usually, single-purpose reverse mortgages are offered only for senior citizens with low or very low incomes. You may need one of our other loan programs like a Proprietary Loan.
Determining The Availability
Compared to other types of reverse mortgage, a single-purpose reverse mortgage is cheaper to obtain. It can be used for one specific purpose such as home repairs and improvements, paying property taxes, and so on.
Despite being the least common form of reverse mortgage, single-purpose loans can benefit some seniors. However, they are not widely available. You will likely need to apply for a reverse mortgage from a government or nonprofit organization in order to receive one.
The Pros And Cons
Among the benefits of a reverse mortgage are that it can give you a steady source of income without having to sell your home. Moreover, since the loan doesn't count as income for federal tax purposes, it won't affect your social security and Medicare payments. Nonetheless, it's important to remember that some people have lost their homes because they could not pay monthly fees. In the same way, it could cost your heirs if you fail to pay your monthly fees.
A single-purpose reverse mortgage allows older homeowners to borrow against the equity in their home. In return, you'll need to use the money for one specific purpose - paying property taxes or performing maintenance and upkeep on the home. While these programs are generally more affordable than other reverse mortgages, they may be harder to obtain. The pros and cons of single-purpose reverse mortgages differ by lender and purpose.
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