Reverse Mortgage Texas Taps Your Equity Tax-Free

2007-11-09 05:11:17

( Financial )



One way of tapping your home equity and receiving tax-free cash, particularly if you are retired, is to obtain a reverse mortgage. You can use the proceeds from your reverse mortgage Texas for anything you want, but it would be prudent to spend it for your living expenses, medical costs, prescription and in-home care.

With a reverse mortgage, you have four ways to receive payment. You may choose a lump sum check, take a line of credit which allows you to write checks against the amount while the unused funds earn interest in the bank, regularly receive monthly payments, or a combination of any of the three. If you change your mind after you have chosen the payment method, you can actually switch anytime. Most lenders of reverse mortgage Texas allow you to do that for a small fee by re-computing the payout schedule.

The amount you can borrow is dependent on the interest rates, the value of your home equity, and your age. Like in most other types of mortgages, a reverse mortgage Texas may charge a variable or fixed interest rate. You will also have to pay closing costs and insurance premiums. Your reverse mortgage will be due and demandable in case you die, when you move permanently or sell your home. To prevent the bank from repossessing your home, you or your heirs must pay off the entire loan amount.

To qualify for a reverse mortgage Texas, you and all the other persons named in your title must be at least sixty-two years old. Your home must be your primary residence, that is, it should be where you stay more than half of the year, collect your mail and file your taxes. It must also be a single-family residence, townhouse, condominium, manufactured home, or one unit which belongs to a multi-unit property that you own.


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