Is a Reverse Mortgage in your Future?
by Pete Belcastro.
As we age, there are several options homeowners could take advantage of that might make your life better. One of these is the Oregon Homestead Exemption, the other is a Reverse Mortgage.
Outside of these, there aren’t any programs designed to support older homeowners. Here is how they work.
Homestead Exemption: Must be 62 years or older and own your home for at least five year. The exemption is property taxes again the property are deferred or exempted until the property is sold. It allows seniors to stay in their home longer. A lien is placed upon the property and must be paid at the time of death or the property is sold. Taxes are still paid, but not while the homeowner is alive. Many Oregonians take advantage of this law.
Reverse Mortgage: Must be 62 or older and have a lot of equity in your home, if not own it free and clear. These are FHA insured loans against the value of the property. If you owned a $400,000 home the reverse mortgage could become that figure and you’re paid in lump sums or monthly. The property eventually goes to the lender to sell and recoup the money. It’s not for everyone but can be a good tool to use. The older you are the more you can borrow. Check it out.
Unfortunately you cannot get a reverse mortgage and have a homestead exemption at the same time. It is one or the other. This is fully explained by Matt Allen, Pacific Residential Mortgage in the Real Estate Show from December 12. He was joined by David Sprague of Umpqua Bank Home Lending who talked about other financing options available today.
Know what your options are and you might find something that makes sense for your situation and make your final years a bit easier.