Are you a senior resident of Tennessee seeking home equity without selling your home? Cleveland TN reverse mortgages may be the best option for you! Reverse mortgages don’t have rules about credit scores or income, but they do have age and home equity requirements. To be eligible, you must be over 62 years old. Additionally, you must either completely own your home or have over 50% equity on the house itself. Eligible borrowers must first complete a HUD-approved counseling session before paying the required fees: orientation fee, upfront mortgage insurance premium, and interest. Once they complete this, the borrower has different options to choose from when it comes to Cleveland TN reverse mortgages; the cheapest one being single purpose.
Single Purpose Reverse Mortgages
Single Purpose Cleveland TN Reverse Mortgages are the least expensive option when it comes to reverse mortgages because they’re backed up by nonprofit organizations as well as the state. This reverse mortgage type isn’t as common for borrowers because it isn’t available in every state. However, it is available in Tennessee.
Borrowers can only use this type of reverse mortgage for lender-approved, singular purchases for the home. For example, needed repairs or property taxes. The balance does not come due until the borrower sells the home, the borrower moves out permanently, or the borrower dies. In unfortunate cases, the balance could become due in the circumstance that the house becomes condemned by the state, or the homeowner’s insurance goes unpaid.
Pros of Single Purpose Mortgages:
1. Tax Free
These mortgages are not subject to tax because they are repayable loans.
2. Easy Qualification
Homeowners with low or average incomes can qualify for this mortgage, whereas they may not qualify for others.
3. No Monthly Payments
The loan balance doesn’t require scheduled monthly payments. The payment only becomes due once the home is sold, the homeowner moves out, or the homeowner dies.
Cons of Single Purpose Mortgages:
1. Possible Fees
Although this is the cheapest mortgage possible, it still comes with fees such as closing costs. Additionally, there’s interest costs for the loan.
2. Restricted Use
The funds from the mortgage can only be used for lender-approved purchases revolving around the home.
3. Restricted Access
These mortgages aren’t available in every state. Luckily, Cleveland TN reverse mortgages are offered in Tennessee!