For many folks in their retirement years, home equity can be a substantial part of your overall net worth. According to recent figures, the equity in your home can amount to roughly 30-40 percent of your net worth, if you’re in the majority. If you and your spouse are both at least 62 years of age and have significant equity in your home, a reverse mortgage can turn that equity into tax-free cash without forcing you to move or make a monthly payment. If it’s right for you, a reverse mortgage can be a worthwhile financial tool. If not, you could cause some serious problems for your financial future. A reverse mortgage gets its name because of the way it works. Instead of the borrower making payments to the lender, the lender releases equity to the borrower in a number of forms: A lump sum cash payment; A monthly cash payment, like a […]
reverse mortgage
Is a Reverse Mortgage Right for You?
As individuals near retirement there may be a need for additional income in order to support their living expenses in retirement. On this blog we have discussed creating income streams in retirement with annuities, Social Security optimization, and withdrawal strategies in qualified accounts. For some individuals these streams of income may not be enough. Another potential vehicle to assist with providing income in retirement is a reverse mortgage. Reverse mortgages are where an individual or couple uses the equity in their home to received monthly income payments. Generally, once the owners pass away or sell the home, the loan is paid off with the remaining equity in the home. There’s also a limit on the amount a homeowner can borrow. The most popular form of a reverse mortgage is the home equity conversion mortgage (HECM) offered by the Department of Housing and Urban Development (HUD). To qualify, individuals must be […]
Sterling Raskie, MSFS, CFP®, ChFC®
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