Reverse mortgage AZ is a loan secured by your residential property. Thus, a reverse mortgage Arizona could be the key component to your retirement planning. This is by enabling retirees to access the unencumbered value of the property. Therefore, if you just retired and looking for an alternative approach to ensure a steady flow of cash, taking Reverse Mortgage Arizona is never a bad idea. In this post, we feature some good reasons we believe that applying for a reverse mortgage in AZ is a smart decision.
1. A good Cash-Flow Plan
A majority of retirees in Arizona experience a poor cash flow. Consider that before retirement, one was used to getting a monthly paycheck and hefty allowances, hence a steady cash flow. Things turn to the opposite side after retirement. One is left in a situation we would call “house rich, but cash poor”.
Reverse mortgage AZ offers a quick and efficient kickback plan. Thus, you are able to cater to the rising cost of living, affording a good lifestyle. If the recurring expenses like medication, food, or utility bills strain your monthly budget, cash from a reverse mortgage plan can be a good plan.
You can apply for a lump-sum payment or choose distributed monthly repayments to help you ease the burden of mortgage repayments.
2. You Do Not Lose Home Ownership
The notion that reverse mortgage equates to selling your house is wrong. With reverse mortgage AZ, you retain homeownership, so long as you continue living in it. You just need to make sure that utility bills are serviced; you pay the outstanding home mortgage and keep the property in good shape while keeping to date with the homeowner’s association fee.
3. You Do Not Struggle With Monthly Mortgage Repayments
Unlike the conventional home loan, the reverse mortgage does not require that you keep paying monthly mortgage repayments. Ideally, it is the bank paying you for your home, and letting you live in the house without making any monthly repayments. However, this does not mean that you cannot repay the mortgage. In fact, if you or your borrowing spouse chooses to repay the borrowed amount, you just need to work out a repayment plan with the reverse mortgage lender and reverse the conditions set forth during application for reverse mortgage AZ.
4. No Restrictions On How Mortgage is Spent
The proceeds from a reverse mortgage can be used for living expenses, repaying the original home mortgage, funding healthcare expenses, or even funding an upcoming vacation. Ideally, the mortgage lender does not raise any restrictions on how the mortgage borrower is expected to spend the amount borrowed through the reverse mortgage. It is within the borrower’s discretion to determine how they want to spend the money borrowed.
However, we advise that reverse mortgage proceeds should be spent wisely and responsibly. Consider that outliving the reverse mortgage amounts could result in a serious financial crisis. This is the reason why reverse mortgage lenders require that reverse mortgage borrowers are educated on the reverse mortgage before submitting the applications.
5. Minimal Out of Pocket Expenses
The Reverse Mortgage Proceeds can be used to Fund Closing costs and Ongoing Mortgage Fees. Therefore, if you are worried about raising money that can be used to finance the closing costs and the application fee on a conventional loan, a reverse mortgage offers you peace of mind.
6. Refinancing To Access More Money
The value of your property is what determines how much you qualify to borrow as a reverse mortgage. Thus, if your house is within a strategic location with potential for growth, you can take reverse mortgage today and refinance when the value of the property has increased. Alternatively, you can repay the reverse mortgage, and earn a profit by selling the property at a higher value.
7. Reverse Mortgage Offers Flexible Payment Plans
The reverse mortgage offers different ways you can receive the proceeds. The payment plan chosen by the borrower will affect how much you will receive in the short or in the end. Let us look at the different options you will get with the reverse mortgage options:
- The Fixed-Rate Payment Plan: if you want a fixed-rate reverse mortgage, you can apply for the single-disbursement, which is also referred to as the lump-sum payment.
- The Tenure Payment Plan: This is where the equal monthly payments are made so long as one borrower lives in the home as the principal
- Term Payment Plan: you will receive equal monthly payments for a set period, as you prefer. This is the best payment plan if you have a clear idea of how long you will live in the home.
- Line of Credit: this is where you get access to reverse mortgage proceeds as you need. Thus, you can determine to draw upon your credit line and the amount to take so long as the balance is below the principal limit.
A reverse mortgage is a good place to start planning your retirement. The application process is simple and comes with friendly requirements. Apply for a reverse mortgage today.