Since we’re still in the beginning of the year, many of us are still seeing success in keeping our New Year resolutions. And sticking to those resolutions may mean prioritizing strict budgets, trimming unnecessary expenses, and living a more frugal life. Making thrifty decisions is a wise habit, but when it’s an absolute necessity that can’t be avoided, frugality can become a burden. A reverse mortgage may help you enjoy a better life in 2017, and here are just a few of the ways it can do so.
Reverse Mortgage Uses
- Eliminate Your Existing Mortgage Payment– If you currently have a mortgage on your home, the funds from a reverse mortgage will first be used to pay off your current mortgage. Any remaining proceeds will be available for you to use. It’s important to remember you are still responsible for paying your property taxes, homeowners insurance and maintenance costs.
- Delay Accessing Your Retirement Assets or Allow Your Retirement Assets More Time to Grow – Protecting against inflation and keeping your assets growing can be a complicated ordeal. However, by choosing to tap into your home’s equity, you can continue to give your assets time to grow.
- Consolidate Debt – When such existing debts as auto loans, mortgages, college loans, and credit card bills begin to pile up, life tends to become a little hectic and stressful. A reverse mortgage can help streamline your debts by providing you some extra income to help pay some of these bills. While a reverse mortgage is another form of debt, by using it to pay off other debts, you are able to deal with one bill – due when you sell the home, move out, or pass away.
- Purchase a New Home – Seniors often move closer to their family or relocate to warmer climates during retirement. Using a HECM for Purchase, you may be able to buy your dream home in your dream location. Your new home won’t require monthly mortgage payments – instead, you will pay a down payment determined by the age of the youngest borrower or non-borrowing spouse – and, of course, your property taxes, homeowners insurance, and home maintenance costs.
- Age in Place Thankfully, because a reverse mortgage can eliminate your existing monthly mortgage payment, you can continue to live in the home you love without worrying about having to downsize – and you still own your home. Just make sure to pay your property taxes, homeowner’s insurance, and maintenance expenses.
- Pay for Health Care – Health care and prescription drug expenses are on the rise as usual, and sometimes Medicare isn’t quite enough to cover all of your medical needs. To preserve a high quality of life, it is important to know what your body needs and take care of yourself as you age. A reverse mortgage may provide the funds necessary to cover most if not all of your medical expenses.
- Delay Social Security – You may be aware that delaying your Social Security benefits may increase the money you can get in the long run. While you are able to start collecting as soon as you turn age 62, you can delay until the age of 70, increasing the amount of your Social Security benefits. While Social Security and Medicaid may not be impacted by taking out a reverse mortgage, Supplemental Security Income may be reduced, so you should contact your financial advisor before taking out a reverse mortgage.
These are just a handful of ways that you could use a reverse mortgage to improve your life in 2017. Like many other types of loans, the reverse mortgage can relieve you from tough situations. However, as with any major financial decision, it is important that you learn about all of your options before committing to any life-changing choice. When in doubt, please consult with a financial advisor.