After years of paying down your mortgage, the bulk of your wealth now rests in one main asset: your home. Now, think of your home like a savings account- you have a lot of cash built up in your home from paying your mortgage over time, and depreciation has made it grow even more- this is your home equity. The older you become and the longer you’ve been in the home, the more money that has been invested into the home. Now, you want to take out some of that money to help towards retirement expenses. The traditional ways to tap into your home equity are a home equity line of credit, or a cash-out refinance. For seniors, a really great solution would be a hybrid of the two- a reverse mortgage.
A reverse mortgage is one way to tap into that home equity. It allows you to convert part of the equity in your home into cash without having to sell your home or pay additional monthly bills. A reverse mortgage provides an additional income stream for seniors.
A reverse mortgage is unique because of the different options available to you. Some borrowers use the reverse mortgage line of credit as an additional safety net. Others choose to pull out a lump sum to pay off debt that is causing them a monthly cash flow crunch. Others choose to create a monthly income stream for life, and others refinance their existing mortgage into a reverse mortgage. This will benefit the borrower because now they have no monthly mortgage payment. So, the money they were spending each month on a mortgage payment. Is now theirs to spend on living life to its fullest. Using one of these options or a combination of all of them can be a strategic financial retirement tool.
Many of our clients are tapping into your home equity to provide themselves with extra money to maintain their lifestyles during retirement. Two big factors that make now the best time to tap into your home equity. 1. Interests rates are at an all-time low. This means that we can open up more of your home equity to you. 2. Housing values are at historical highs. The higher your home’s value. The more we are able to lend. If using home equity as part of your financial plan is for you? Give me a ring and lets chat.