Is Your Piggy Bank Running Out?
Reverse Mortgages: Aiding Seniors In Keeping Their Homes And Buying New Ones
- by Chris Lamm
The home equity for many people in the senior community is around 30 –40 % of their net worth. Many often don’t have the money available to make fundamental repairs to their home. If you have significant equity in your home and you and your spouse are at least 62 years old, you can get a reverse mortgage to turn your equity into tax-free cash, save your home, and eliminate monthly payments. It is NOT required that you are employed, or possess credit. The only two qualifying factors are age and equity.
There are many positive aspects to obtaining a reverse mortgage, so long as it is used correctly as a financial tool. However, if you aren’t careful, you could cause ruin in regards to your financial future. For instance, you wouldn’t want to take the equity you’ve received and squander it in a casino.
Instead, a reverse mortgage is best used for necessary, day-to-day expenses or unexpected, high costs of care or debt. Often, reverse mortgages are considered as an alternative to a home equity line of credit. The proceeds can be used for a variety of things, including supplementing monthly income, purchasing a car, traveling and purchasing a second home. If you want to use money from a reverse mortgage to modify your estate taxes, you will need to check with a financial adviser to see if this is possible.
Did you realize that a reverse mortgage could actually be used towards the purchase of a house? How can that be done? Let’s learn by example; imagine that you are senior and you sell your home and earn a total value of 300K. They can take the amount received and finance the remainder with a reverse mortgage. In addition, many senior citizens consider moving from older homes to a condo or loft that requires less upkeep. This could be a wonderful way to accomplish it.
It’s important to talk to your family so everyone understands the core financial meaning and ingredients of a reverse mortgage. Family members and financial advisers would be great assets for seniors to discuss a reverse mortgage. That is why seniors should discuss reverse mortgages with the families and a financial advisor.
Chris Lamm, a published expert on Reverse Mortgages specializes in helping to show his clients their hidden retirement account. You can confidentially contact him at 530-953-8555 or at clamm@s1l.com
