Retiring is a big life change and a lot of people look forward to the golden years – understandably so. One of the best ways to give you that extra financial boost in retirement is to use a reverse mortgage.
The reverse mortgage is very advantageous for those who want to make more of the investment they’ve placed in their home. If you still have a mortgage it allows you to make eliminate it and if you have equity you can access it, while still living there. It’s a powerful way to improve on your spending when you retire. So, let’s take a look at some of the big benefits.
Default is not realistic
The chances of defaulting on an equity loan tend to be quite large, however the chances of this being the case with a reverse home mortgage are virtually none. There’s no payment on the loan until you leave the home. However, you’ll still need to pay for tax and insurance for it. The company that provides the reverse mortgage have no claim on your income either.
The reverse mortgage can be advantageous in a number of ways. One of the foremost manners in which it’s of benefit is that you will never owe any more than the home value at the time the mortgage is repaid. So, for example if you’ve received more than the home value and the price declines you can do well from a reverse mortgage.
Reverse mortgages are loans and so they are not susceptible to taxation – something that a lot of people find of benefit. This is the case whether it’s a lump sum or a fixed income.
Spend at Will
It’s your money and you can spend it as you like – it’s up to you in essence. Why not go travelling or buy a new car. It’s your money and
you can do as you wish with it.
There are a number of flexible payment options available with a loan like this and you can receive the whole lot as a lump sum, credit line or in any shape or form you like
With a loan like this you also get to stay in your home and retain the ownership of it. You will need to pay for taxes on the property and maintenance but it’s your home to live in rent free for the duration of the agreement. You can sell the remaining equity if you like and companies such as YouSellQuick are happy to help.
One thing that’s becoming increasingly popular is that if you take your loan amount out – it can be a home equity credit line. This can money can be left aside in a high interest paying account and you can make a lot of money from it. Of course, there are risks but it can be very beneficial financially and make you a lot of money.
So, as you can clearly see a reverse mortgage on your home can be a notable benefit and provide you with plenty of money, a better quality of life and you still get to live in your home.
About the Author: Cormac Reynolds has written a number of articles on money and finance for Christmas. He’s a writer and a journalist with a strong sense of commitment to money saving.