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A Great Opportunity in Your Retirement Years

20 February 2018 No Comment

If you are nearing retirement or have already retired only to find yourself short of cash, you need to learn about a reverse mortgage. Perhaps you have enough money to live on, but that is all. You don’t have any extra cash to do some of the things you want to do. Whatever the case may be, if you find yourself with less money in retirement than you would like to have and you have equity in your home, then you should learn about a reverse mortgage.

What is a reverse mortgage?
A reverse mortgage is a type of mortgage in which you receive money each month from a lending institution. You are not paying them money, they are paying you money. In essence, you are selling your house, and they are making payments to you. You may be wondering what the difference is between a reverse mortgage and simply selling your home? The big difference is that you are living in your home while you receive payments each month. It is simply a process in which the bank is slowly buying your house.

A reverse mortgage is better than a second mortgage
Often when an individual retires, they realize that much of their wealth is tied up in their home. A house that is nearly paid off has a lot of equity built up, and this represents a lot of savings. In truth, it may be most of your person’s savings. There is nothing wrong with this. Many Americans put their savings into their home. You can tap into this equity by getting a second mortgage, but this may not make sense because paying off this second mortgage may be difficult if not impossible given a fixed income in retirement. A reverse mortgage solves this problem because it reverses the process. You don’t have money going out, but you do have more money coming in. This can make a huge difference in the quality of your life in retirement.

A reverse mortgage is better than a line of credit
If you no longer have a mortgage, obviously, you won’t be getting a second mortgage, but you can get a line of credit. Actually, you can get a line of credit even if your home isn’t paid off, and this is often a good alternative to a second mortgage. However, a line of credit has the same problems as a second mortgage. You will end up making payments each month. Payments that you cannot afford. Again, a reverse mortgage means you get paid each month.

You can have your first mortgage paid off
This is a big relief for many people as you retire, you can tap into the equity of your home with a reverse mortgage, but a reverse mortgage can first pay off your first mortgage. Think about this. You are currently making payments, but the balanced owed is paid off, and then you are paid money each month for the equity in your home. You go from making monthly payments to receiving monthly payments. It may sound too good to be true, but it is not.

A reverse mortgage is offered by many lending institutions, and they can give you more information. American Advisors Group is just one example. An AAG Reverse mortgage, like all others, is available to those who are 62 years and older, and you can live in your home until you die.

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