Home equity for homeowners over the age of 62 in the United States is continuing to rise. In Q3 of 2017 it increased by $121 billion, bringing senior housing wealth to a total of $6.5 trillion.1 Rising home equity comes as welcome news at a time when many seniors are faced with managing their own retirement savings. Home equity can be a much needed resource for living a more comfortable retirement.
For many seniors, the bulk of their wealth lies in their homes. The Center for Retirement Research at Boston College recently found that Americans over the age of 65 often have more cash in their homes than in 401(k)s, IRAs or other investments. The average U.S. homeowner age 65-74 has $125,000 in financial assets. By comparison, those same individuals have an average of $150,000 in home equity. That disparity grows, to $115,000 in assets and $160,000 in home equity, between the ages of 75-84.2
A reverse mortgage offers senior homeowners the means needed to tap into their home equity and turn it into usable cash. With a reverse mortgage, homeowners are able to eliminate their monthly mortgage payments3 and access a portion of their home equity without the need to sell their home. Additionally, all reverse mortgages are insured by the Federal Housing Administration (FHA)4 and non-recourse, meaning the homeowner will never owe more than the value of the home loan.
If you are looking to live a more comfortable retirement, a reverse mortgage may be an option for converting your home equity into the funds you need. To learn more or request a free eligibility assessment contact a licensed loan advisor at 1 (800)976-6211 or click here to request a call back.
1 National Reverse Mortgages Lenders Association. Senior Home Equity Grew by $121 Billion in Third Quarter. https://www.nrmlaonline.org/about/press-releases/senior-home-equity-grew-121-billion-third-quarter
2 Center for Retirement Research at Boston College. Using Your House For Income In Retirement. http://crr.bc.edu/wp-content/uploads/2014/09/c1_your-house_final_med-res.pdf
3 You must still 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 Federal Housing Administration (FHA) mortgage insurance premiums (MIP) will accrue on your loan balance. You will be charged an initial MIP at closing. The initial MIP will be 2% of the home value not to exceed $13,583. Over the life of the loan, you will be charged an annual MIP that equals .5% of the outstanding mortgage balance.