Is a Reverse Mortgage right for you?
As baby boomers like myself begin to age most of us are asking ourselves whether or not we want to stay in our house or age in place. One option in tackling such a financial hurdle is by taking out a reverse mortgage. A reverse mortgage is a vehicle that allows you to convert your home equity into dollars. Reverse mortgage money can help pay for home upgrades, in-home assistance, medical care, pay bills or just ease the anxiety of not enough month at the end your money. So how does a reverse mortgage work?
A reverse mortgage is an annuity that uses your home as collateral. The amount of the loan is based on your age when you take out the mortgage, the value of your home and the interest rate at the time of settlement.
The income you receive from a reverse mortgage is not taxable and the real estate taxes are still a tax deduction. The loan is paid back when you move, sell your home or at the time of your death.
The size of your reverse mortgage depends on your individual financial situation. Usually the older the you are and the more your property is worth, the larger the loan can be. The loan can be paid out in a variety of ways, including as a lump sum or as monthly income.
Before taking out a reverse mortgage, it’s important to understand all aspects of the loan and whether it’s appropriate for situation.
Your expert team, including your SRES® designee, a certified public accountant, a lawyer and close family members, can help you to explore your options and determine whether a reverse mortgage is the financing option that best meets both your short- and long-term needs. For a financial resource and more information on reverse mortgages, contact an SRES® designee.
by Rick Sheppard