When you first learn of reverse mortgage Arizona, the reaction could be that “it is too good to be true”. Well, this is a common feeling among first time reverse mortgage applicants. However, the reality is that reverse mortgage AZ has come to be the best option for many retirees. However, when it comes to winning the Reverse Mortgage process, many are still short of options. In this post, we tell you tricks to help you win the reverse mortgage process in Arizona. Through these tricks, you will not experience any challenges with your reverse mortgage.
- Plan To Remain in your home For Many Years to Come
The worst mistake that many seniors who apply for reverse mortgage AZ make is not evaluating their long-term plans before the application is done. Some have lost the right of property ownership just like that! This is where you apply for a reverse mortgage, and once the money has been sent to your account, you start planning to leave your home and stay with your children. For whatever reasons you move, this amounts to going against the set rules. It is important that the borrower plans to live in that house for a lifetime. Otherwise, if you vacate the property, the lenders assume that you are in breach of the conditions, and could sell the property to recover the amount. Thus, the property you intend to borrow against should be your primary residence.
- Do your homework Before Applying for Reverse Mortgage AZ
If you think a reverse mortgage is the best option when it comes to funding your retirement, it is important that you do your homework. Consider attending reverse mortgage counseling, which is also a part of the reverse mortgage application process. The counseling process is an educative session where you get to learn the implications coming with a reverse mortgage.
- Pay Property Taxes and Insurance When due
Reverse mortgage borrowers are supposed to keep servicing the property management and home insurance. This is as per the reverse mortgage terms which stipulates that if you do not pay the home insurance and maintain the property such that it does not depreciate, you are deemed to be in contravene of the mortgage terms. Thus, you would want to use the money from the reverse mortgage to pay the home insurance and keep the property well maintained.
- Let Your Family Know That You Are Getting into Reverse Mortgage
Getting a reverse mortgage is usually a big decision and requires input from the rest of the family. Thus, talk to your spouse and children, let them know you intend to apply for a reverse mortgage. Family members need to know that when a borrower passes on while still living in the property, they will be responsible for repaying the mortgage. Thus, they may have to sell the estate and service the mortgage or pay off from other sources in order to keep the property.
However, keep in mind that reverse mortgage does not have to be repaid until the borrower moves, had died, or planning to sell the property.
- Find a Reliable Reverse Mortgage Lender
It is important you investigate the mortgage lenders to ascertain that they are a reliable company, and will not end up frustrating you after or during the reverse mortgage application process. Thus, you can read online reviews or talk to other persons who have borrowed a reverse mortgage.
- Choose the most suitable Payment Plan
With a reverse mortgage, you get a chance to choose the most appropriate payment plan. The different payment plans come with varying levels of risk to the borrowers. Thus, it is important you consider a payment plan that suits your requirements while the risk level is lowest. Here is an overview of the different reverse mortgage payment plans.
- The Fixed-Rate Lump Sum: this entails receiving only one reverse mortgage payment. The single disbursement lump sum comes with a fixed interest rate, while it is considered to be a low-risk way to borrow.
- Line of Credit: the chances of running out of money with the line of credit payment plan depend on how the plan is used. The reverse mortgage line of credit is irrevocable. This means that the borrower is not in danger of losing access to the money.
- Term Reverse Mortgage: Choosing the term reverse mortgage payment plan puts the borrower at the risk of outliving the reverse mortgage proceeds.
You can choose one of the payment plans or go for a combination of two plans. However, the most important thing is to make sure you choose the most appropriate method.
Now you understand the important undertakings when it comes to reverse mortgage. Be sure to speak to a reverse mortgage counselor to understand the implications. Otherwise, the reverse mortgage can be the best way to finance your retirement.