Having a home is mostly appreciated as time goes by. The longer the house stays with its owner, the more this asset increases in value. Additionally, the money you are paying on the mortgage will also increase your equity on the property. And then, the value of real estate more likely increases through time. This is why investing on home ownership is generally a winner.
Eventually when you advance in age and get ready for retirement, switching your home equity to cash can become a consideration. Here is where reverse mortgage can be considered as an option. Basically, reverse mortgage is a loan which uses the home equity as collateral and will not have to be paid pending the happening of an event, such as sale of the house. In essence, you have turned around the conventional mortgage process wherein the lender gives you money for a part of the home equity. The payments can be had in one lump sum or monthly through credit units depending on the package you have chosen. Through time, you will have decreased home equity but you will have a stable and regular monthly source of money.
Of late the government has been trying to find ways to reduce the cost of benefits that they have to disburse to its citizens. They would like to make use of the value of your own assets. If you own real estate properties, your benefits are either lessened or totally cut as they argue that you are not in need of dole outs from the government. This article will not delve into a meticulous study of government benefits, however, reverse mortgages definitely have an effect on this.
By and large, having a reverse mortgage on your real estate property will not change your Medicare or social security benefits. This applies only, however, if you consume the amount lent to you by the lender. The applicable amount is $2,000 for single property owners and $3,000 for couples. Benefit issues are foremost on the government’s agenda, cutting it down where and when they can. It will be to your advantage if you keep yourself updated with all the data related to this situation. You should take into consideration the effect reverse mortgage can have on your Medicare most especially if you depend on it too much for payment of hospital bills and medical maintenance.
Basically, reverse mortgages do not affect most benefits granted by the government to its senior citizens. Still, you should get a professional’s reliable opinion prior to taking reverse mortgage.