Reverse mortgages have become an increasingly important financial tool for people 62 and older who want to remain in their home and fund their retirement. One half of all reverse mortgages were made in just the last couple of years. With over 78 million baby boomers approaching retirement, reverse mortgages are no longer mortgages of last resort. Many financial planners are stating not if a reverse mortgage is needed, but when? Barry H. Sacks, J.D., Ph.D. a practicing tax attorney in San Francisco, CA with his brother Stephen R. Sacks, Ph.D. examined three strategies for using home equity, in the form of a reverse mortgage to increase the safe maximum initial rate of retirement income withdrawals. See the full article click here.
A reverse mortgages is secured by the value of a house, there’s no repayment required on this loan as long as the borrower keeps their home as their primary residence, pays their property taxes and keeps homeowner’s insurance.
So, when does a reverse mortgage make sense? Consider the following questions:
- Do you have equity built up in your home?
If you’ve diligently paid down your mortgage, a reverse mortgage may is a way to realize a portion of that financial value.
2. Are you satisfied with your current level of retirement income?
Many retirees are finding traditional retirement tools including investments, IRAs, and Social Security income do not provide enough income to comfortably fund current living and healthcare expenses. Taking a reverse mortgage is a way to boost your cash flow each month.
3. Do you want to retire your existing mortgage?
Many retirees are still paying on a conventional mortgage; as a result, they have less cash at the end of the month. A reverse mortgage can potentially pay off an existing mortgage, freeing up money for other things.
4. Is a reverse mortgage better than a refinance or home equity loan?
For many retirees, the income and credit requirements on a refinance or home equity loan may prove to be challenging. Reverse mortgages do not have these requirements.
Consider these questions and educating yourself with reverse mortgage facts to make an informed decision if a reverse mortgage is right for you.
Angella Conrard is designated as a Reverse Mortgage Specialist by the National Reverse Mortgage Lender’s Association. She works exclusively with these special types of loans. Angella originates in 35 states.
Angella represents all reverse mortgage products on the market and keeps a close eye on legislation, senior issues and upcoming trends that will best serve her clients. If you have a reverse mortgage question, Call Angella for a sales free, pressure free consultation. Call 866-949-7030.