Who Else Can Benefit from It
Home reversions are a great way to increase the value of your home. Here’s how they work: you take out an equity loan on your property and use it for whatever purpose you like. The person who sells their house back to you is the one who pays off that loan, which means that they’re essentially selling their future down payment (or even mortgage) to you at today’s value. We will look into who else can benefit from teaching seniors about home reversion other than just seniors themselves!
The first group of people who can benefit from home reversions are those working on their credit. Many lenders look at your debt-to-income ratio, meaning they’ll take a percentage of the income you make every month and divide it by how much money in total that you owe to different creditors or debt collectors (i.e., if you made $1000 this past month but have three bills that equal out to be about $700, then that means your DTI is 70%).
When looking for mortgages, banks will often accept as high as 50%, so long as there’s no delinquencies; however, anything over 40% usually doesn’t go through without any major questions being asked. This makes home reversions an excellent option: not only does it allow you to add value to your house (which is already a good thing), but the person who buys their home back from you will then take over that debt. This means they have one less bill each month, and if everything works out well enough for them, they can even get approved for more mortgages in the future because of how great their DTI looks!
The next group of people who could benefit from teaching seniors about home reversions are those looking to downsize or relocate. Some people just don’t want as much space anymore: either there’s too many bedrooms for only themselves living there, or everyone has moved away so now the place feels like a museum instead of an actual residence.