It is All about Flexibility
The primary benefit that one receives with a reverse mortgage is financial flexibility. It is an excellent way to tap into the equity that has built up in your home over time without having to sell the house. After living in your home for decades, moving is often not desirable; staying in the home is the priority. Unlike a traditional home loan, the payment terms allow for the flexibility of not making monthly mortgage payments! Certainly, you can choose to pay the loan down and if you want to later sell and move, you pay back the mortgage through the sale. There is no prepayment penalty.
An Extra Source of Income
Supplemental income is one reason homeowners chose to have a reverse mortgage. Depending on the circumstances, funds can be received as a tenure payment, which is the same monthly payment for life as long as the borrower occupies the home, pays property taxes, homeowners’ insurance, and other property charges. It’s also possible to receive term payments: a certain amount of money for a certain period of months or years. One might want a line of credit where all available funds are left in the line of credit to access as needed. Every borrower’s situation is unique, as is their financial portfolio, debt, income, and savings. Therefore, each reverse mortgage use is unique to the homeowner. Note: do not compare your loan to someone else’s loan!
The funds you receive can be used however you want. You can invest in renovations for your home, take a nice vacation, invest in the stock market, or simply leave it in your bank account. It is a helpful ‘bridge’ income source that will ensure that you have no trouble taking care of life’s many expenses.
A Contingency Fund, Just ‘In Case’
Finally, a reverse mortgage can be an excellent contingency fund. If you take this out as a line of credit, the money will be available when it are needed. Many retired individuals lack a financial ‘safety net’ ending up with unexpected health or other costs. With a reverse mortgage, you can sleep soundly knowing that emergency funds are there if needed. As you can see, taking advantage of a reverse mortgage can be the catalyst that helps take your retirement to the next level.
To learn more about reverse mortgages, contact your local certified Reverse Mortgage Professional (CRMP) for guidance and expertise.
