A reverse mortgage is viable a financial tool for senior homeowners age 62 and above. Frequently known as HECM (Home Equity Conversion Mortgage), a reverse mortgage, allows the homeowner to pay back their existing mortgage, while they continue to live in their home, pay their bills, and use the remaining money of the loan with no restrictions.
A reverse mortgage has the ability to give you the financial freedom you desire. Although a reverse mortgage can be used for whatever you choose, here are a few of the most popular uses of reverse mortgages:
Looking to travel? Wanting to visit family and friends more often? Not sure how you could afford such a trip? A reverse mortgage could make your travel plans a reality. For tips on how to get the best airfare rates click here.
It is expected that even if you retire at age 65 and are in good health, you can anticipate around $220,000 in health care costs well into your 80s. These costs fail to include caregiver costs, nursing home fees, or simple over-the counter medications like pain relievers all of which could quickly amount to tens of thousands of dollars annually.
Surprisingly enough more and more seniors still have student loans to pay off even in their mid to late 60s. According to the Washington Post, “The total outstanding debt load held by seniors grew to $18.2 billion in 2013, up from $2.8 billion in 2005.” A great way to rid yourself of expensive student loans is through the proceeds of a reverse mortgage.
Credit Card Debt
Handling debt is one of the biggest challenges retirees have today. Many soon-to-be retirees blame debt as one of the main reason why they are postponing retirement or not retiring all together. A reverse mortgage can help get you the funds you need to pay off any debts you may currently have, and relieve you of the financial stress caused by it.
A very popular way people use the proceeds from their Reverse Mortgage is take care of home improvements. Home improvements are a great way to add value to your home, as well as mold your residence to be exactly how you have always imagined.
Supplement Social Security Income
Delaying receiving your Social Security until the age of 70 can drastically increase the amount you are eligible for. According to the Social Security benefits website, a person born between 1943 and 1954 who started collecting benefits at age 62 will receive 75 percent of the benefit they would have received if they delayed collecting to age 66. If that same person were to delay getting their benefits even longer to age 70, benefits would increase 32 percent more than at age 66. Those who delay collecting Social Security see an average annual increase in their benefits roughly 3 to 8 percent over those who collected earlier. By obtaining a reverse mortgage, you can post pone the need for your social security benefits and increase income.
Reverse mortgages are government-insured, and the equity you collect is tax-free* cash which you can choose to receive in a lump sum, monthly payments, a line of credit, or a combination of the three. Currently there are no income or credit requirements for a reverse mortgage and you are never required to make a payment as long as you live in your home.** For additional information on the reverse mortgage program click here, or contact a One Reverse Mortgage specialist that will be happy to further assist you.
*Please consult with your financial advisor.
**Homeowner is still responsible for taxes, insurance and property maintenance.