Reverse Mortgages Mean Staying Ahead of Home Repairs
A reverse mortgage offers homeowners age 62 and older an affordable avenue to access their home equity. For some, this provides an opportunity to pursue a lifelong dream, while others may simply make it a part of their retirement strategy.
In any case, tapping into your home’s value also makes you contractually obligated to be a responsible homeowner. It shouldn’t be surprising that owners will need to continue to pay property taxes and homeowners association fees, as well as insure the home against hazards. But many may not realize there is also a requirement to maintain the property up to the lender’s standards.
Once you have closed on your reverse mortgage, the lender will have a vested interest in your home’s condition. It’s likely they will even schedule regular inspections to assess the property. The good news is they probably won’t be paying much attention to the scuff on your wall or weeds in your flower beds.
Instead, they will want to see that you are keeping your home structurally sound and taking necessary steps to avoid significant problems down the road. Protecting your home against termite infestation and keeping your roof free of leaks will likely be near the top of their checklist.
The simplest way to stay in the good graces of your lender is to take a proactive approach. Make sure you repair small problems like leaks before they turn into big issues like rotting wood or mold. If you start noticing the early symptoms of a shifting foundation – sheetrock cracks and doors that won’t close properly – enlist a specialist to evaluate the situation. And have a plan to regularly check your roof, foundation and structure of your home so you can catch problems early.
If you’re considering a reverse mortgage, it’s best to take the maintenance aspect seriously. Failure to do so could result in the value of your home dropping and even put your ownership at risk.
A popular tactic is to set aside an appropriate amount of the funds from the loan to have ready for any repairs that may be needed in the future. Doing so can protect your reverse mortgage and give you invaluable peace of mind to enjoy your future.
If a reverse mortgage might be right for your retirement, contact us to discuss your options with an Open Mortgage Loan Origination Specialist.
Things to know about Reverse Mortgages:
- At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds
- Charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees
- The loan balance grows over time and interest is charged on the outstanding balance
- The borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home
- Interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment