How does a reverse mortgage work?
I have a equity loan of 15,000.00. It is coming do soon. I am 70 years old and had been working, but now I am unable to. I am behind on my property taxes two years, soon it will be three, then my house can be sold. I do have good credit, I have been thinking of a new mortgage as I no longer owe on the first. I have lived here for over thirty years. My problem is I don't have prove of income anymore except social security 815.00 a month. I have two roommates which gives me 640.00 a month more but is not considered income. What do you suggest?
You are a good candidate for a reverse mortgage if your house has a good amount of equity. If you apply for a reverse mortgage, you more than likely will be able to pay off your equity line and all the back taxes. In addition, you may receive monthly payments or a lump sum without making mortgage payments. This is a very good decision if you want to remain in the home. There is no income qualification. However, the lender will want to make sure that you can pay the taxes and insurance for the future years.
A reverse mortgage is a bad idea to use to catch up on property taxes. When thinking about a reverse mortgage you must determine the suitability for you (is it the right financial decision). It's your sole responsibility to do so. It needs to be part of your financial strategy, provide financial security through retirement and meet your wishes for your estate. All of this before you even think of using it to pay back taxes. A reverse mortgage is a complex financial transaction with lifelong consequences. I hear your concern about being behind in taxes but a reverse mortgage is not for an immediate need or you will be in deeper trouble soon.
PS - check for State programs that can help you with the taxes. In CA we have a program called RevMap which gives up to $25,000 to help consumers behind in their taxes or insurance.
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