How a Reverse Mortgage Can Help With Your Retirement Plans
If you are thinking about your retirement plans and you are concerned about your finances, you are not alone. If you are a homeowner, there may be an option for you that doesn’t involve selling your home or passing debt onto your children. The answer is reverse mortgages.
First of all, what is a reverse mortgage? It is a special type of home loan that lets you convert a portion of the equity in your home into cash.
According to Urban Institute stated that, now more than ever, Americans are concerned about their finances as they approach retirement but they claim there is a way to prevent that:
“Current and future retirees could improve their living standards and financial security by liquefying a portion of their home equity to supplement their retirement income. Seniors have a higher homeownership rate and are more likely to be mortgage free than the general population.”
Reverse mortgages may have a bad reputation in the past but thanks to the changes to the Federal Housing Administration’s HECM program, reverse mortgages have become safer, less expensive, and more helpful.
If you are a homeowner, you’ve poured thousands of dollars into your home and you have every right to use that money for whatever you need whether it’s for an investment, medical bills, and house repairs. The best use of a reverse mortgage, however, is to invest the money and add your profits to your retirement fund. Your home’s equity has the potential to enhance your retirement security.
The best part about a reverse mortgage is that you get to keep and live in the home that you love. When it comes to the title, a reverse mortgage is no different than any other mortgage. A common misconception is that the homeowner loses the title in the event of a reverse mortgage but that is not the case. The borrower keeps their name on the title.