Aging in place with confidence: how reverse mortgages can benefit you
If you’ve reached that point in life where you’re thinking about the years ahead and what you want them to look like, your financial plan plays a big part in the options available to you. The idea of ‘aging in place’ – staying in your own comfortable home – may be your preference, but you might feel that it doesn’t fit into your financial plan. That’s especially likely if you are facing a fixed income and potential health care or home care expenses. A reverse mortgage might be the tool that empowers you to do just that. Let’s explore how it works.
Understanding reverse mortgages for seniors
Reverse mortgages allow seniors to take some of the equity out of their home, tax free, without having to sell the property. Unlike traditional mortgages or home equity lines of credit, where you need to make regular payments to the lender, a reverse mortgage allows you to receive funds from the lender without needing to make any payments at all. You need to be over 55 years of age and to have some equity in your home. The amount you can get depends on things like your age (and if applicable, your partner’s age), your home’s value, and current interest rates.
Why a reverse mortgage solution may be appealing for seniors
1. Having more financial freedom
A reverse mortgage can provide a tax-free source of funds to cover your living expenses, medical needs, home maintenance, and even travel or entertainment.
2. Your home, your haven
You get to keep your home while simultaneously accessing your home equity.
3. Financial flexibility
You get to choose how you receive the funds. This includes a lump sum or several lump sums, receiving regular payments, or a combination of these. The idea is to match your needs as closely as possible.
4. You don’t make any payments
Taking on a reverse mortgage does not add to your monthly expenses. You don’t need to make any payments toward the mortgage (although you can if you like). The loan will be due when you either sell your home, move out, or pass away.
Consider all angles
As always, I recommend that you make an informed decision about whether a reverse mortgage is the right solution for you. Please don’t hesitate to get in touch with me for a free consultation about your situation.
To learn more about reverse mortgages, some of my other posts can be found below. Just click on the titles to get to the articles:
When a reverse mortgage is the right option
Why are reverse mortgages getting more popular?
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Hello, great article, covers all the considerations. Just wondering, is there a time limit on how long you can live in the property? Thanks!
Hi Suze, thanks for your comments. There is no time limit; the main restriction is that you must be over 55 to qualify for the mortgage.
All the best!
Wow, sounds like a great option. Thanks for the response.