Skip to content
Menu
Reverse Mortgage Information
  • Site Menu
    • Home
    • A Reverse Mortgage Could Provide a Comfortable Retirement
    • Advantages and Disadvantages Of A Reverse Mortgage
    • AFR – Applicable Federal Rate
    • Home Equity Loan With a Reverse Mortgage – Your Home Pays You
    • Met Life Predicts Surge in Reverse Mortgages
    • Pay off Mortgage Question
    • Retirement Income Planning and Home Equity
    • Reverse Annuity Mortgage – Tapping Into Your Equity
    • Reverse Mortgage – Providing Peace of Mind Without Sacrificing Safety or Security
    • Reverse Mortgage Counselors – Michigan
    • Reverse Mortgage Definition
    • Reverse Mortgage Interest Rate
    • Reverse Mortgage Payment Options – Are You Prepared to Self-Insure Life Expectancy?
    • Reverse Mortgages – A Tax Free Income For Senior Citizens
    • Reverse Mortgages – Learn The Facts First!
    • Reverse Mortgages – Are They Just Plain Wrong?
    • Reverse Mortgages: Information You Need to Know
    • The Reality Retirement Calculator – assessing needed income for retirement
    • Use a HELOC to Step Into a Reverse Mortgage
    • Privacy Policy
    • Contact Us
    • Disclaimer
Reverse Mortgage Information

Retirement Income Planning and Home Equity

Posted on March 12, 2023

It is difficult for retirees to live independently in a home of their own on social security alone. Even though social security offers regular cost of living adjustments, social security payments will not keep pace with rising costs. Many retirees who have been able to fund their retirement for years eventually simply run out of money. A home equity loan may be the answer for those retirees who want to maintain their own home and independent lifestyle.

Is it financially prudent to spend the home equity while continuing to live in the house? While many retirees have no other options, using the home equity to live on is at times recommended by financial advisors, especially if the retirees really want to stay in a home that they have occupied for decades. While younger people establish a line of credit type of home equity loan, retirees may or may not be interested in a line of credit.

Home equity can also be used to finance another retirement home. Many elderly prefer to have another residence in warmer climates during the winter months. One way to afford this luxury is to take a second mortgage from the first home and put it down on another residence. Many of these second residences are manufactured homes, which are much more affordable than single-residence estates.

Investing in owning property can pay off great rewards come retirement. Retirees should be very careful how they elect to use the house’s equity and who they take advice from. Many scammers target the elderly’s lack of ability to protect themselves from plans that don’t work in their best interest. Many people in retirement years mistake a friendly sales person for being trustworthy and are not as fully educated about the risks they face by signing on the dotted line.

The most common type of second mortgage for those in retirement is called a reverse mortgage. Reverse mortgages allow the owner to borrow from the equity as long as he is living. Every month, he receives from the mortgage company a “lifetime annuity” payment. As long as he continues to live in the house, he will get lifetime tenure payments. These mortgages are not as common as many would believe since this mortgage makes it hard for the owner to will his house to another family member upon his passing.

Sometimes, specially arranged wills permit the elder to remain in the house, use the value of the house to pay off their living expenses, and pass on the house upon his passing. Another way to arrange a living will is to sign over the house to another living relative. The living relative signs over monthly payments from the value of the house to the elderly person. Whatever balance is left in the value of the house upon the elderly person’s passing is automatically willed to the trustee.

Affording retirement is a very daunting fact nowadays; especially since social security income may not be around decades from now. Using your home equity to finance your retirement may end up the primary option for many of those who hit retirement in the next couple decades.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts

  • Reverse Mortgages – Are They Just Plain Wrong?
  • Retirement Income Planning and Home Equity
  • Home Equity Loan With a Reverse Mortgage – Your Home Pays You
  • Reverse Mortgage Definition
  • Reverse Mortgages: Information You Need to Know
  • Pay off Mortgage Question
  • Reverse Mortgage – Providing Peace of Mind Without Sacrificing Safety or Security
  • Reverse Mortgage Interest Rate
  • Reverse Mortgages – Learn The Facts First!
  • Reverse Mortgage Counselors – Michigan
  • A Reverse Mortgage Could Provide a Comfortable Retirement
  • Reverse Annuity Mortgage – Tapping Into Your Equity
  • The Reality Retirement Calculator – assessing needed income for retirement
  • AFR – Applicable Federal Rate
  • Advantages and Disadvantages Of A Reverse Mortgage
  • Met Life Predicts Surge in Reverse Mortgages
  • Use a HELOC to Step Into a Reverse Mortgage
  • Reverse Mortgage Payment Options – Are You Prepared to Self-Insure Life Expectancy?
  • Reverse Mortgages – A Tax Free Income For Senior Citizens

Categorized Tag Cloud

reverse mortgage v bank home equity loan Reverse Mortgage eligibility borrowing against a home’s equity Should we pay off our mortgage? Spot Loan program line of credit traditional home equity loan How much does a Reverse Mortgage cost Before you pay off your mortgage HUD reverse mortgage HUD-approved lenders What else should I know about Reverse Mortgages? As a monthly income
©2023 Reverse Mortgage Information