Here’s Why Retirees Should Consider Home Equity Conversion Mortgages
Reverse mortgages also known as Home Equity Conversion Mortgages (HECMs), have been available as an option for any qualified homeowners aged 62 and older. Recently, there have been changes made to the program to make Home Equity Conversion Mortgages safer and more secure. Because of these changes, reverse mortgages are not considered a last resort and, instead, they are considered a valuable tool.
The primary benefit of a reverse mortgage is that it provides you with money to help you cover your retirement expenses without giving up the title to your home or sell it. You’ve put thousands of dollars into your home and you have every right to use that money. With a reverse mortgage, you can continue to live in your home and even use the proceeds of your loan to help cover your monthly mortgage payments.
According to Reverse Mortgage Daily, “More aging Americans today may find they don’t have the proper financial security that they had hoped for, either due to not saving enough or carrying significant debt into what should be their retirement years. Some may also have less-than-expected investable assets or a lower-than-expected income.”
Many retirees may assume that because they no longer have work income, they don’t have any options to get a new mortgage or refinance an existing one. On the contrary, there are ways that retirees can get access to mortgage loans which allow them take advantage of low interest rates by refinancing.
“A reverse mortgage requires careful planning in order to meet both buyer and seller needs, but when it’s done properly it can be a great way to ease financial strain,” said Steve Schaefer, a reverse mortgage specialist with American Family Funding. “As long as someone pays their property taxes and homeowners insurance and maintains the property, they never need to make another monthly mortgage payment as long as they live in the home.”