How does a reverse mortgage work, and when is it appropriate for a homeowner to get one? Here is what you need to know.
What is a Reverse Mortgage?
In short, a reverse mortgage is a type of home loan secured by a primary residence, where repayment is deferred to a later date – generally when the home sells. This loan allows you to convert some of the equity in your home without having to sell your home.
The Benefits ~ Why this option?
- Remain independent aging in place and afford home health care.
- Increase monthly cash flow, pay off an existing mortgage, credit card or other debt.
- Cover expenses vs selling off other assets.
- Have a standby line of credit (LOC) for life’s surprises for example health care, home remodeling, adult children’s needs.
- Delay social security to age 70
- Bridge the gap in retirement planning caused by the recession, depressed assets, premature job loss, low-interest returns on the portfolio, etc.
- Extend the life of other assets under management.
- Deferred home maintenance.
- Buy a new car or travel.
- Create a larger estate for their heir with proper estate planning.
- Older adults do not want to be a financial burden on their children.
How to Make a Reverse Mortgage Work for You?
To learn more about reverse mortgages, contact your local certified Reverse Mortgage Professional (CRMP) for guidance and expertise.