The Reverse Mortgage A Retirement Tool

“Housing wealth, working in conjunction with other retirement income, has been researched and proven to extend or strengthen their nest egg to ensure cash flow survival.” – The Journal of Financial Planning

Bolstered by new research in the Journal of Financial Planning, leading financial experts view accumulated home equity as an investment that has matured and is now an important resource in retirement planning. For many seniors, home equity or “housing wealth” is their largest asset.

Financial planning research has shown that coordinated use of a HECM Credit Line starting earlier in retirement outperforms waiting to open a HECM as a “last resort” option once all else has failed. HECM’s have transitioned from a last resort to a smart income tool that can be incorporated as part of an overall efficient retirement plan

 

How Reverse Mortgages Help Your Retirement

Increase your cash flow by ELIMINATING monthly mortgage payments

  • Every month, your mortgage payment takes the largest portion from your income. But with a HECM Credit Line, your existing mortgage is paid off which increases your cash flow. Having the Flexibility of a mortgage payment can sometimes make all the difference to strengthen and enhance your retirement.

Have access to a GROWING Credit Line

  • With a HECM, you have an increasing Credit Limit available to you. The unused portion of the Credit Line actually “increases” every year giving you access to more cash if needed.

Provide a contingency fund for unexpected expenses

  • In retirement, you could run into unexpected expenses. However, with the HECM Credit Line you can shield against any of these and more, such as:
    • Health issues
    • Major home repairs
    • Loss of income from death of a spouse
    • Long-term care
    • Credit card debt
    • High property taxes and homeowners insurance

 

As you know, life is unpredictable. All the uses listed above, as well as many others are viable reasons for having access to your home’s equity.

Reverse Mortgage Retirement Strategies

If you’re smart about investing in a reverse mortgage, you could save a lot of money by adding additional income streams and paying off outstanding debts. Here are just some of the money-saving reasons you may want to consider using a reverse mortgage to enhance your retirement:

Pay off other debts:

Many older Americans have high-interest credit card debt they can’t fully pay off. A reverse mortgage can give you the help you need to catch up on other debts, freeing up even more money for you to utilize in your retirement years.

Delay social security benefits:

Did you know that the longer you put off taking your Social Security benefits, the better your benefits will be? By investing in a reverse mortgage before tapping into Social Security, you can gain a new line of credit to draw from, meaning you may be able to put off your Social Security benefits for several years, thanks to the extra funds.

Growing line of credit:

Yet another option to grow the funds you already have, taking your reverse mortgage money as a line of credit can let you build up the available amount over time. Interest is only charged on the money you take out, so you can choose to let it grow for as long as you’d like before withdrawing it, letting you access more money when you eventually need it.

Fund your needs and hobbies:

With most reverse mortgages, there are no limitations on how you can spend your money. Some people may choose to take the trip of a lifetime or fund home improvement projects. Others may need expensive medications or at-home care that isn’t entirely covered by Medicare or insurance. Whatever your needs, this new source of income can help you fund them.

Contact Senior Lending 

Are you starting to think about retirement planning? If so, don’t go through the process alone. There are many different financial facets that must be taken into consideration.

At Senior Lending, we are dedicated to helping the current and future retirement community properly retire – the way you want.