For many seniors who want to gain a little extra spending money, a reverse mortgage can be the answer. While some seniors choose to go this route in order to pay their regular living expenses, others obtain a reverse mortgage so they can cover special expenses. Whatever the reason, homeowners over the age of 62 should certainly take the time to learn more about reverse mortgages so they can determine if this loan option is right for them.

What is a Reverse Mortgage?

A reverse mortgage is a special type of mortgage that is only available to homeowners who are 62-years-old or older. “Unlike other federally-insured mortgages, you do not make payments when you obtain a reverse mortgage,” explains Brian Kinkade. Rather, you are only required to pay your taxes and your homeowner’s insurance while you receive payments or a lump sum payment from the lender. If you already have a mortgage on your property, the old mortgage will be paid off when the new reverse mortgage is put in place. You are then free to use the money in whatever way you wish.

Why Should I Get a Reverse Mortgage?

While some seniors choose to obtain a reverse mortgage simply so they can cover their regular living expenses, there are several other reasons to consider obtaining this type of loan. Here are a few suggestions:

Have input into how your heirs spend their inheritance – with a reverse mortgage, you can give your kids and your grandkids their inheritance before you pass away. Not only does this allow you to have more say in how it is spent, it also allows you to see them enjoy the money while you are still around.

Pamper yourself – with the help of a reverse mortgage, you can tap into your home’s equity so you can live your golden years to their fullest. Use the money to take a dream vacation or to purchase that car you have always wanted to own.

Take care of health needs – some seniors are concerned about rising health costs and how they will cover those expenses. A reverse mortgage loan can give you the money you need to meet your long-term health care needs. The money you get from your loan may be used to pay for insurance coverage or to actually cover the cost of long-term healthcare.

Get out of financial trouble – if you are in financial trouble that threatens to put you into foreclosure, a reverse mortgage can help you get out of trouble. Since reverse mortgages have no credit requirements, you can still get a reverse mortgage even if you are in foreclosure or you have just completed a bankruptcy.

How Can I Get a Reverse Mortgage?

To get a reverse mortgage, simply consult your favorite lending institution. You should be aware, however, that the government has made it mandatory for seniors to complete independent reverse mortgage counseling before they can obtain one of these loans. This mandate was put in place in order to help protect seniors from predatory lending practices.