If you are like many seniors, you may be living on a fixed income. Often, that income isn’t enough, and you may be doing without some necessities in order to afford other day to day expenses. Because the cost of living is steadily increasing, many seniors must pay for medical bills, prescriptions, food and utilities before they can even consider larger expenses. If you find yourself in need of major home repairs/updates or a new vehicle, but you can’t afford it then you are not alone. The good news is that you may be eligible for a reverse mortgage loan that can provide you with another source of income during retirement.
Homeowners who are at least 62 years old and have significant equity in their home may be eligible for a reverse mortgage loan. Homeowners can tap into that equity and receive monthly payments, a lump sum payment or a line of credit, and the loan does not come due until the homeowner passes away or no longer lives in the home full time.
Home repairs and updates can be costly. If your heating or air conditioning units are old, worn, or haven’t been maintained properly, you may have to purchase a new one. Bankrate estimates that new units cost about $5,000 with high efficiency models starting at about $10,0001. U.S News estimates that homeowners on average will spend between 1 to 4 percent of a home’s value annually on maintenance and repairs, which tend to increase as the house ages, according to several real estate websites and mortgage firm Freddie Mac2. If you haven’t been able to afford regular maintenance, a reverse mortgage loan could be the best option to afford those repairs or updates.
Senior homeowners may also find that their home isn’t as accessible as it could be. If you have stairs in your home and have difficulties using them, a chair lift could be helpful. If you’re going to purchase a chair lift from a local dealer, expect to pay between $2,000 and $5,000, including installation3. If your standard bathroom needs to be remodeled to be more accessible, Consumer Reports claims you may spend between $16,000 and $52,000, based on the type of renovation needed4. Unless you have significant savings, that can be a difficult amount of money to come up with.
Another large purchase many seniors put off making is buying a new vehicle. Maybe your current vehicle is requiring costly repairs or you don’t feel safe driving it anymore. Maybe you need something larger that can accommodate a wheelchair or scooter. In August 2014, Kelly Blue Book estimated that the average price of a new car in the United States was $32,4955. Even if you’re considering a used car, you may still have to take an auto loan and be able to afford the monthly payments.
Reverse mortgage loans can often be a simple financial solution for senior homeowners who need extra income. If you need more money to live comfortably in your home, call 866-751-3606 for more information and to see if you qualify.
1 http://www.bankrate.com/finance/mortgages/home-improvement-costs-for-5-problems-5.aspx
2 http://money.usnews.com/money/personal-finance/articles/2012/05/29/look-at-maintenance-costs-before-leaping-into-homeownership
3 http://home.costhelper.com/stair-lift.html
4 http://www.consumerreports.org/cro/2012/03/bathroom-remodeling-guide-trends-and-costs/index.htm
5 http://www.marketwatch.com/story/new-car-transaction-prices-jump-nearly-3-percent-in-august-2014-according-to-kelley-blue-book-2014-09-03