Ideally, your retirement is a time of relaxation. You have set aside enough funds to live a comfortable life and enjoy a well-earned rest. But things don’t always work out as planned.
For example, you may have built up a solid retirement fund and suddenly a large expense surprises you or you may not be able to put away as much as you wanted. In this case, you may need a way to cover the deficit.
Tap into you Home is equal Can be a cost-effective way to access much needed funds. When is the most common option Home equity loan And Home Equity Lines of Credit (HELOCs)Seniors have an additional option: a Reverse mortgage.
Reverse mortgages are available to homeowners age 62 and older who have almost or completely paid off their mortgage. These are a unique type of loan where the lender pays you instead of the other way around. you can get goes forward Either in the form of a lump sum, line of credit or monthly payment, and you don’t have to pay the lender as long as you live in the home.
If you’re looking for a source of cash in your retirement, read on to learn how a reverse mortgage can benefit you.
Compare your reverse mortgage options online now.
3 Reasons Seniors May Consider a Reverse Mortgage
There are many here Because a reverse mortgage may be right for you If you are a senior. Here are three of the bigger ones.
You can use it if you want
There are no restrictions on what you can use your reverse mortgage funds for. You’re free to use them however you want, from providing supplemental income to paying for in-home care. This makes them a flexible funding source for a myriad of needs.
Check your eligibility for a reverse mortgage here.
This eliminates your monthly mortgage payment
Most loans require you to make monthly payments to repay the loan. Different types of reverse mortgages. If you still owe money on your mortgage, you’ll need to pay it off first using your reverse mortgage funds. This may reduce the total amount you receive from the loan, but it also means your mortgage payments will not go forward.
Reverse mortgage payments are not due until you sell the home, move or die. Once this happens, you or your heirs must repay the money out of pocket or with the proceeds of the sale of the home. You don’t have to worry about monthly mortgage payments while you live in the home. This can give you some extra breathing room in your budget.
You don’t have to pay tax on it
You do not incur tax on reverse mortgage funds. They are basically tax free income. As a result, they won’t increase your income tax rate or interfere with your Social Security or Medicare benefits.
However, you must continue to pay your property taxes (as well as home insurance). If you don’t, the lender may foreclose on your home.
While there are many benefits to getting a reverse mortgage, seniors should also be aware of potential pitfalls. For example, because reverse mortgages are secured by your home, you risk losing it if you are unable to pay your property taxes or home insurance. They come with closing costs and other fees.
to decide If a reverse mortgage is right for youWeigh carefully Advantages – Disadvantages. If you need additional guidance or have any questions, a mortgage specialist can help you.
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