If a senior is in a financial emergency, they may consider a reverse mortgage loan to help cover unexpected expenses, pay down debt, or afford monthly necessities. Reverse mortgages are available to seniors 62 and older who have at least 50% equity in their homes. In addition, seniors must meet specific property requirements, live in their home as their primary residence, and pay property taxes, insurance, and any house repairs during the duration of the loan. Here are several reasons retirees may consider a reverse mortgage loan.In a financial emergency, seniors may not have the luxury of going through drawn-out processes to get money. This makes a reverse mortgage an attractive option because it provides a secure and quick cash flow for retirees. A reverse mortgage allows seniors to borrow against the equity of their home to receive their line of credit or cash lump sum.A reverse mortgage has several requirements, including meeting a HUD-approved reverse mortgage counselor. This meeting ensures that seniors understand their options before committing to a reverse mortgage loan. Other qualifications include:Specific property types: single-family homes, 2\u20134 unit properties, condominiums, townhomes, and manufactured homes (built after 1976).Financial responsibility: paying insurance, property taxes, and home maintenance.Taking out a reverse mortgage can provide proceeds either as a cash lump sum or a line of credit. In either case, the IRS classifies money received from a reverse mortgage as a loan advance as opposed to income. That means that, unlike other sources of retirement income like distributions from a 401(k) or IRA, which would be taxed, reverse mortgages are not taxable.Taking a large withdrawal from a retirement account could help counteract a financial emergency, but the withdrawal would be subject to tax, often heavier tax rates than normal. Meaning seniors wouldn\u2019t be able to keep all the money they\u2026<\/p>","protected":false},"excerpt":{"rendered":"
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