One of the best financial options to consider when you are older and retired is a reverse mortgage, mostly because this option can provide you with an extra income stream to help you supplement your retirement savings. Listed below are three reasons to consider reverse mortgages:
Provides A Supplemental Income
One of the biggest reasons to consider a reverse mortgage is that they can provide a supplemental income, which is often very useful and necessary for individuals that are retired and living on a fixed income. A reverse mortgage is typically only available for those individuals that are aged 62 or older and will allow you to sell the equity in your home to the mortgage provider.
In exchange for that equity, the lender will provide you with monthly payments, a lump sum, or a combination of those two types of payments. Now, the payments from the reverse mortgage will continue until you pass away or you sell the house, at which point the load will need to be repaid, either by selling the house or by the individual that takes over your house after you pass away. These extra payments can be ideal for dealing with any unforeseen medical expenses that you run into or to provide you with a better standard of living without having to dip too deeply into your retirement savings.
It Eliminates A Major Monthly Expense
Another reason to consider a reverse mortgage is that it eliminates a major monthly expense. When you sign up for a reverse mortgage, you will no longer have to actually pay the payment on your house, the lender will take care of that.
All you have to do is make sure that you keep the house in good condition and pay any fees associated with the house, such as homeowners association dues or your home insurance payments. This is very beneficial for you when you consider the fact that a mortgage payment is often the largest monthly expense that most people tend to have.
There Are Government Safeguards In Place
Finally, you should consider reverse mortgage because there are government safeguards in place that will prevent you from potentially getting taken advantage of. For example, the government will ensure that the reverse mortgage provider cannot ever charge you more when it is time to pay the loan than the house itself is worth. If the day comes when you must sell your house and you cannot sell the house for enough to cover the full amount of your reverse mortgage, a government program is in place that will pay the remainder of the loan.
Speak to a lender or financial planner today in order to discuss the specifics of a reverse mortgage and to determine if one of these would be a good option for your current financial situation. You will want to consider a reverse mortgage because it can provide a supplemental income, eliminate a major monthly expense, and because there are government safeguards in place to protect you.
Share2 September 2017
My name is Eva, and I have been a personal investment adviser for the past 15 years. I have helped many clients wisely invest their money, and I want to give you some tips I have picked up along the way. Many people discount the use of CDs in investments, and I believe that this is a mistake. Financial professionals agree that CD rates are going to rise, and you can take advantage of that now. This blog will tell you how to find CDs with the best rates, how to build a CD ladder for investment purposes, and why CDs can be better than a savings account.
