If you are a homeowner 62 years of age or older you may want to refinance your conventional mortgage with a reverse mortgage. A reverse mortgage allows you to access a portion of your home equity as cash, while remaining in your home and maintaining ownership.1 Reverse mortgages, unlike conventional mortgages, do not require monthly mortgage payments for as long as you live in the home as your primary residence, maintain it in accordance with HUD guidelines, and pay your property taxes and homeowner’s insurance.2 By refinancing your conventional mortgage with a reverse mortgage you may be able to: eliminate your monthly mortgage payment,3 leverage your assets, and set up a financial backup plan.
Reason 1. Eliminate Your Monthly Mortgage Payment3 – If you, like many seniors, are living on a limited income, eliminating your monthly mortgage payments can play a huge roll in freeing up cash to allow you to live a more comfortable retirement. By using a reverse mortgage to pay off your existing mortgage,4 you can eliminate a portion of your monthly expenses and have peace of mind knowing that you will not miss payments if an unexpected expense arises. You are also free to use the extra cash that would otherwise go towards your mortgage payment however you choose.
Reason 2. Leverage your assets – You can use a reverse mortgage as a tool to maximize your retirement accounts. The real estate market is much less volatile than the stock market. By setting up a reverse mortgage you can draw from your home’s equity instead of your 401(k) plan or IRA in times of low investment returns.5 So, when the stock market is yielding low returns, you can live off of the money from your reverse mortgage while allowing your investment portfolios to recover. This strategy allows you to prolong the life of your retirement savings by further diversifying your investment portfolio using your home equity.
Reason 3. Have A Financial Backup Plan –Many senior homeowners with a substantial amount of equity often fail to consider the equity in their home as a source of money for unexpected expenses, like home repairs, or medical bills. A reverse mortgage can be a useful financial tool as unexpected expenses pop up during your retirement years. With a reverse mortgage, you can set up a line of credit that allows you to access your home equity any time you need it. This can be used as a rainy day fund, to be drawn on if you need it.
Contact a licensed reverse mortgage advisor to discover if refinancing your conventional mortgage with a reverse mortgage is right for you. Call 1 (800)976-6211 or click here to request a call back.
1 You will retain the title and ownership during the life of the loan, and you can sell your home at any time (at which time the loan becomes due). The loan will not become due and subject to repayment as long as you continue to meet loan obligations such as living in the home as your primary residence, maintaining the home according to the Federal Housing Administration (FHA) requirements, and paying property taxes and homeowners insurance. Failing to meet these requirements can trigger a loan default that may result in foreclosure.
2 You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.
3 You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.
4 Your current mortgage(s) and any other existing liens against the property must be paid off at or before closing.
5 Now it Counts, Financial Planners Take a Look at Reverse Mortgages, http://nowitcounts.com/financial-planners-looking-at-reverse-mortgages/