Taking out a retirement loan is not a decision to make lightly. You’ve worked hard for years to pay for your home, and a reverse mortgage means that you’ll need to spend a portion of that equity to repay loan fees and interest. However, if you find yourself in a situation where your retirement planning no longer provides adequate cash for your needs, an equity release loan could be a solution. Retirement loan brokers look at specific criteria to determine whether you qualify for a retirement loan, but apart from meeting the qualifications for a reverse mortgage, you should also get retirement loan advice to find out whether taking out credit on your home is a good idea in the first place.
When is a Retirement Loan a Good Idea?
- If you are 60 or older. The older you are, the more sense it makes to get a retirement loan. If you don’t need money immediately, a retirement loan consultant might recommend postponing a reverse mortgage. Some lenders require the youngest borrower to be 70 or older. If you are married, you should also consider your spouse’s financial needs and find out how a reverse mortgage will affect them when you are not there anymore.
- If a retirement loan will solve your long-term financial problems. You must own your home outright, or it must be nearly paid off so that you have enough capital for a reverse mortgage loan. If you need to pay off your remaining mortgage balance rates.
- If you have enough cash to afford ongoing costs. Retirement loan brokers will point out that one of the provisions of a reverse mortgage is that your homeowners’ insurance and rates are paid up to date, and that you maintain your property. Failing to do these things could cause the lender to pronounce your loan due and payable.
- If you don’t need to leave an inheritance. If you don’t have children or a spouse, or they are financially independent, it makes sense to get retirement loan advice before taking out a loan. The mortgage can never become more than the value of your house, and it will ensure that you have enough cash to provide for your needs.
- If you don’t intend to move. If you take out a retirement loan, you should plan to stay in your home. Although some lenders will allow you to rent out your home with a reverse mortgage, others require that you sell your house when you move. If you move within a few years of taking out a loan, repaying the mortgage, as well as costs dependent on the loan, might mean that you are left with too little money to afford a place to live.
Talk to a Qualified Retirement Loan Consultant
A Reverse Mortgage Finance Solutions consultant can meet with you at your home. We believe that the best way to determine whether a retirement loan is a good idea is to meet personally and discuss your options. Contact Reverse Mortgage Finance Solutions, or phone 1800 001 020 for one of our nationwide network consultants to visit you.