New Reverse Mortgages for Retirement Planning: The Modern Reverse Mortgage – 10 Debt Management Strategies For Baby Boomers. Reverse Mortgages Gain Traction as a Retirement Planning Tool. Reverse mortgages are becoming an increasingly popular option for retirees looking to supplement their income and improve their financial security. Once seen as a last resort for retirees with limited savings, reverse mortgages are now being used for a variety of reasons, including:
Increasing retirement income: Reverse mortgages allow homeowners 62 and older to convert a portion of their home equity into cash. This cash can be received as a lump sum, monthly payments, or a line of credit that the homeowner can tap into as needed. This additional income can help retirees cover their living expenses, healthcare costs, or other retirement needs.
Improving financial security: The security of a reverse mortgage comes from the fact that it is a loan against the home itself. Unlike traditional mortgages, there are no monthly payments due with a reverse mortgage. This can provide retirees with peace of mind knowing that they won’t face foreclosure as long as they continue to live in their home and pay property taxes and homeowners insurance.
Covering unexpected expenses: Reverse mortgages can be a helpful tool for covering unexpected expenses, such as medical bills or home repairs. With a reverse mortgage, retirees can access the cash they need without having to sell their home or tap into their retirement savings.
In this video, Don Graves, the president of the Housing Wealth Institute, explains how reverse mortgages work. In a nutshell, a reverse mortgage is a loan from a lender to a homeowner 62 or older. The loan is based on a portion of the home’s equity, and the homeowner does not have to repay the loan as long as they live in the home and meet certain obligations, such as paying property taxes and homeowners insurance. When the homeowner dies, sells the home, or moves out permanently, the loan becomes due. At that point, the heirs can either repay the loan or sell the home to satisfy the debt. For more information about Don’s class, follow this link: https://hecmadvisorsgroup.com/about-us/about-don-graves/or watch more free videos on Finstream about retirement planning at this link: https://www.finstream.tv/videos/retirement-planning/