Reverse mortgages and your retirement lifestyle
March 1st, 2011
- Reverse Loans and Early Retirement
- Should you pay off a mortgage or get a reverse loan?
- Reverse mortgages and medical costs
- Unlike Unicorns, Fixed-Rate Reverse Mortgages Do Exist
- 3 Things You Must Do When Getting a Reverse Loan
What type of retirement lifestyle do you hope to have? Many of today’s seniors live very active lifestyles that involve a focus on physical fitness, travel and enjoying hobbies. While not having to work a 9-to-5 can allow you spend more time doing activities you enjoy, being on a limited income can put a crimp in your plans. Some senior citizens have chosen to supplement their retirement incomes with reverse mortgages to improve their quality of life. Should you?
Reverse mortgage taps home equity
You must be a homeowner and have enough home equity to convert some of it to cash to get a reverse loan. But how comfortable are you with tapping home equity? It may be tough to give up the security of having a house that is paid in full or knowing that you will pay off a mortgage in a just a few years. You’ll need to consider your own comfort level with swapping equity for cash.
No more monthly mortgage payments
You may be more likely to give up home equity if you are struggling to make payments on a home loan. Borrowing with a reverse home mortgage allows you to stop making monthly payments and puts money in your pocket. The proceeds from a reverse loan can be used for most purposes, so you have control over how you spend it.
Get all the facts about reverse mortgages
It is a big deal to convert home equity into cash no matter what your financial situation is. That’s why the Home Equity Conversion Mortgage (HECM) program requires that you meet with a reverse mortgage counselor before applying to borrow money. The counselor can review reverse mortgage guidelines and analyze your finances to determine the pros and cons of borrowing with a reverse mortgage.