Wisconsin Reverse Mortgage

Some Benefits of a Wisconsin reverse Mortgage

A reverse mortgage enables homeowners over the age of 62 to safely convert their home equity into cash without taking on a mortgage payment. There are a few ways you can take the cash and we will discover those later. The most popular Wisconsin reverse mortgage is the Home Equity Conversion mortgage (HECM) that is insured by the federal housing authority or the department of housing and urban development. These government agencies regulate, market, and insure a vast majority of Wisconsin Reverse Mortgages. Needless to say they make sure that these programs are run the right way and seniors are not taken advantage of.

The question I am most asked by seniors who are considering a Wisconsin reverse mortgage is, "what are the benefits of doing a reverse mortgage?" I have listed some of the benefits below.

First and foremost is the fact you can receive payments instead of making them. Lets say you have a 50,000 mortgage left that was taken out 22 years ago. Your payment is about 750 a month with your current mortgage. If you have a good amount of equity available you could pay off that mortgage and eliminate the 750 payment and also get 300 a month paid back to you. That is a difference of over 1000 a month for your new budget.

the income you receive is considered tax free. If you get 500 a month it is really like getting 575 because no taxes are taken out. This is money you could be receiving for the rest of your life or as long as you live in your house. You will never have to repay the money for as long as you are living in the house.

The money you receive can be taken out as a lump sum, line of credit, or monthly installment payments. You can actually have a combination of the three if you chose the ultimate in flexibility for Wisconsin Seniors. This money you take out can be used as you see fit. There are no regulations about how the money is to be spent. Some examples are everyday expenses, grandchildren’s education, taking trips or anything you can think of.

One of the key factors is that you retain title to your home. No one comes in and takes your house or starts making decisions based on what they feel is right for you. you get to live in the house for as long as you are able too. It is your house and titled in your name. many seniors feel they can't afford to live in their house with the expenses that are involved but this would give you the flexibility to live in the house as long as you want.

the final advantage I want to talk with you about is the qualifications. Unlike a mortgage they are really easy to get. First both spouses must be over 62. There are no income requirements to get approved. Unlike a standard mortgage where you have to show you can afford the payment, the reverse pays you. There are no basic credit qualifications other than no current bankruptcies or defaulted federal loans (check with an advisor may still be able to do something). The collateral needs to be a single family home, Condo, town-home, 2-4 unit building, and some mobile homes. In regards to housing it must be your primary residence. You must have a certain amount of equity in your house to qualify.

As you can see there are a lot of reasons to get a reverse mortgage and they are fairly easy to get. Wisconsin reverse mortgages are not for everyone though. It is imperative you do some research and call an expert in reverse mortgages. If you are certain you are going to do one complete the HUD counseling as soon as possible. It is for an hour and can take up to two weeks to schedule. Hope this has helped you understand Wisconsin reverse mortgages.

Perhaps you find yourself in a very precarious position like a couple of seniors I just helped. I have known a few retired persons who came to me for help because they could no longer afford to live the retired life. By that I mean this. One had condo fees adjust much higher than what it originally was. Then with increased gas prices, general inflation etc. could no longer live on her small social security check and husband’s pension. She was not alone. Another couple came to me because property taxes had risen dramatically the last few years. They too were feeling the pinch of the increased prices and had to work part time bagging groceries to make ends meat. Both of them had social security but that no longer covers much. The sad thing was both of them had done everything correct and paid off all their bills and only had small or no mortgages and car payments left. They both felt it was a hopeless situation and they would have to sell their houses or work forever.

I made a recommendation to them that they should consider a Wisconsin reverse mortgage. I said they are equity rich and cash poor and this might help them with extra income every month for a long as they live in their house. Let me give you a very brief explanation of Wisconsin reverse mortgages. A reverse mortgage allows seniors, 62 and above, to pull cash out of their homes without making any payments. As the name implies a reverse mortgage is opposite of a regular mortgage. Instead of borrowing a sum of money and paying it back to reduce the debt to nothing; a Wisconsin reverse mortgage is getting a sum of money but no payments are made and the debt grows larger over time.

The equity can be pulled out in a lump sum or paid out gradually over time in guaranteed monthly payments. The unpaid interest is added to the reverse mortgage balance each month. Since there are no payments made while the borrowers live there, the loan is only paid off when the home is sold or the owners have passed away. How is the amount of the Wisconsin reverse mortgage calculated? It is determined by four factors:

* The value of the house (fair market value).

* The age of the homeowners (both must be over 62).

* The interest rate the mortgage is qualified at.

* The maximum loan limit of the county you are living in.

The amount that is guaranteed to the homeowners is calculated based on the life expectancy of the borrowers. The loan to value ratio is calculated so home owners won't outlive their equity. The older you are when you take the loan out the more you will get. For example, a sixty two year old borrower with 250,000 in equity could borrow about 110,000 on a reverse mortgage, while a seventy six year old borrower with the same equity would get about 149,000.

It can get a little complicated so it is important to work with someone who knows what they are doing and specializes in Wisconsin reverse mortgages. This is a very popular tool that many seniors are taking advantage of. If you are cash poor and equity rich I would recommend looking at this option to see if it is right for you.