Both home equity loan and home equity line are second mortgage, have income and creditworthiness requirements. The homeowner must make monthly payments to repay the loans.
A reverse mortgage generally has no credit score requirements. The homeowner receives cash from the lender, and does not have monthly payment.
Both cases require the homeowners continue to pay required property taxes, homeowners insurance, and maintain the home in good standing.
Is this the thought in your head all the times? Should I rent or buy? With the low mortgage interest rate ever and expensive rental environment, it could make sense for you to purchase your dream home.
This is a rent vs buy calculator that you can compare the costs of renting vs own a home.
Owning a home is longer term investment. Besides the possible appreciation on your property, you also have tax benefits as a home owner. When you retire, your home could be a source of your retirement income as well, by taking a reverse mortgage.
We will discuss more on different tax benefits as home owner and reverse mortgage on our other posting.
This is a good piece of information from IRS that give you “Tips on Rental Real Estate Income, Deductions and Recordkeeping”.
Some or all of your deductions could be affected by your adjustable gross income (AGI). Please contact your accountant for details.
* Message from your Real Estate and Mortgage Broker, Andy Lam, firstname.lastname@example.org, 408-218-2513