Posted on: 19 February 2021
Many people are having a hard time with their finances during this pandemic because they have lost their job. If you are in this type of situation, and you are older, which is generally over 60, you have different options to help you. Below are two of these options so you can get the money you need.
If you own your home, you can get a reverse mortgage. This is basically borrowing back what you have already paid in. To get a reverse mortgage, you have to apply for the loan and then get approved through a lender. The lender will determine your age and how much your home and property are worth to figure out the amount of money they can offer you.
You do not make any payments for the amount you borrow. You do have to pay back the loan, however, or you will lose your home. The balance will come due when you move out of your home, fail to pay insurance or taxes, or pass away, or if you neglect to take care of your home.
There are different types of reverse mortgage loans available. A lender can go over these types with you. You should be aware that some loans allow you to use the money as you see fit, while others will have regulations on how you can use the money.
Home Equity Loan
Another option you have is getting a home equity loan. This is like taking out a second mortgage on your home. You have to have built up equity in order to get this type of loan. For example, if your home is worth $200,000 and you still owe $100,000, you could borrow up to $100,000 from a lender. Your home is used as collateral. Because of this, if you do not pay back the money, the lender can take your home away from you.
Because you have a home to use as collateral, this type of loan is easier to get when compared to other loans. You will receive the full amount of what you borrow and can use the money any way you wish. You can claim the interest on the loan as a tax deduction in many cases. These loans generally have lower interest rates when compared to personal loans.
You will have to make payments to the lender immediately after receiving your money. They will set up a payment plan with you with a fixed monthly payment.
Talk to a few lenders about your options so you can decide what would work best for you. For more information about reverse mortgages, contact a local bank, like MidwestOne Bank.Share