These loans may be an option if you're 62 or older
It's undoubtedly a great feeling to own your home free and clear, but if you need to get your money out of your house, what are your choices – especially if you're living on a tight budget?One option, if you're 62 or older, is a “reverse mortgage” — a type of home loan that lets you convert your equity into cash, but the loan doesn't need to be repaid until you move out of the house or pass away.Unlike traditional mortgages, you don't have to have a certain amount of income to qualify. The loan amount you'd be eligible for is based on your age, the interest rate and the value of your home, according to the federal Department of Housing and Urban Development. Many traditional lenders offer reverse mortgages; in addition, local and state governments, as well HUD, offer certain types of reverse mortgages.To help protect consumers' interests, the federal government now requires that reverse-mortgage borrowers receive counseling from HUD-certified housing counselors, Lyons said.Explore other options
“The counselor is required to provide information on alternative options, such as home equity loans, property-tax deferments (if available), or help them get a smaller loan if that's really what they're after,” she said. “Also, the counselors encourage people to talk with the rest of their family about getting the loan and notifying them about their decisions,” as repaying the loans will affect the size of their estates.Because interest accrues during the life of the loan, reverse mortgages probably aren't a good choice for homeowners who want to borrow small amounts, she said.“
