Many seniors worry that their assets won’t last through retirement.
You are not alone if you were unable to save enough money to confidently retire. Many baby boomers find themselves in the same situation.
You have options to make life affordable. A reverse mortgage helps those 62 and older use their home equity to cover expenses like travel, aging in place, and visits with loved ones so they can retire happy.
Find out if a reverse mortgage will work for you.
You’ve committed to paying your mortgage for years, building home equity. With a reverse mortgage you essentially convert that equity into cash that you can access to afford retirement, making the most of the investment you’ve made in your home.
The new loan pays off your current mortgage, eliminating monthly payments. Among other benefits, a reverse mortgage doesn’t have to be paid off until your status at the home changes, and the amount of debt owed can’t exceed the value of the property.
Is a reverse mortgage right for you? Connect with a lender to explore your options.
At least one applicant needs to be 62 or older. A younger spouse can be on the loan.
You typically need more than 50% equity in the home for the reverse mortgage to be worth it. You must live in the home at least 6 months per year, must maintain it, and keep up with property taxes, insurance, and HOA dues.
With a reverse mortgage, you get a new loan that pays off your current mortgage and allows you to borrow from your home equity. The new loan does not require a monthly payment.
You receive either a lump sum of cash, a line of credit, or monthly payments that you can use to afford other life expenses. The amount of your new loan will vary based on your age, home equity, property value, and other factors.
A reverse mortgage doesn’t require monthly payments, so it frees up vital income in retirement that would otherwise go toward paying the mortgage. Keep in mind, you do need to maintain the home and continue to pay property taxes and insurance.
In addition to freeing up monthly payments, a reverse mortgage also allows you to borrow from your home equity to access cash for other expenses.
Heirs can sell the home or pay off the reverse mortgage when the homeowner passes away. They are never responsible for shortfalls if the home is worth less than the loan amount at that time.
In short, your family has a chance to keep the home, sell it for a profit, or forfeit it to the lender without penalty.