Graduation, marriage, job promotion, buying a home – life’s biggest moments are the biggest investments in ourselves, our families and our pocketbook. When it’s time for retirement, everything comes together full circle. We finally get to reflect and look back on all our personal and professional achievements, but there’s also time to look forward.
Your home provides the source of one of your largest assets that you’ve worked so hard to nurture. The equity in your home can provide the financial freedom for the next chapters in your life.
Those who are at least 62 years of age can enjoy a reverse mortgage, which allows individuals to draw from their hard-earned equity without repaying*. The requirement is that the homeowner must remain in the home. Interest from the loan is deferred and the applicant is able to get the funds up front.
The amount of the equity retirees can tap into is less than a traditional mortgage. In 2013, lawmakers passed the Reverse Mortgage Stabilization Act, which set the limit on the amount a borrower can take at 60 percent in the first year.
When you decide to opt for a reverse mortgage, you can take advantage of an immediate cash boost to spend as you see fit as you enter a new and exciting phase of your life.
Along with newfound buying power, reverse mortgages offer the advantages of prepping for an unexpected cost or managing a new budget upon retirement.
Another option may be a reverse mortgage purchase, which requires 50 percent down, but no payments as long as the homeowners maintain their resident as their own*. The borrower still owns the home and is not signing away equity, which is another benefit.
If you’re ready to make the most of your retirement through a real estate transaction, contact us today to learn more about the many advantages a reverse mortgage provides.
*The borrower is still responsible for property taxes, insurance, and home maintenance. While there are no mortgage payments the loan is due and payable if: the home is no longer your primary residence, you sell the home, or the last surviving borrower or eligible non-borrower spouse passes away.