3 Benefits To Using A Reverse Mortgage In Retirement
If you are of the opinion that a reverse mortgage is something to only consider when you are in hot water, you couldn’t be more wrong. What exactly is reverse mortgage? In the simplest of terms, a reverse mortgage is a method of transforming home equity from your home into a useable resource. Only people that are 62 years and older can apply for this, however. As the name of the program suggests, it works similarly to a mortgage but in reverse. If you put your abode up for a reverse mortgage, you will have access to cash and be provided with benefits equivalent to your home equity.
Of course, there are naysayers who don’t believe in the benefits of reverse mortgages. However, they are rather amiss with their train of thought as there are numerous benefits to using a reverse mortgage in retirement. With the reverse mortgage plan, you can basically use your home to stay at home. Without further ado, here are 3 benefits to using a reverse mortgage in retirement.
For more information on reverse mortgage, consider visiting the site, reversemortgagepros.ca. You can also scour the National Council on Aging´s booklet for more information about reverse mortgage.
- Need Cash?
It is next to impossible to be completely prepared for retirement. No matter how much money you save up, it will not be enough for you to live a lifestyle you are used to living during your employment days. Therefore, if you have equity in your home, you should consider applying for the reverse mortgage plan. Doing so will give you access to immediate cash. And, the cash can be, in turn, used to pay off other debts. Let´s be honest here—who couldn’t do with more cash?
- Your reverse mortgage loan can increase over time
As we stated earlier, it is very difficult for retired people to survive in this capitalist world. How long do you think your savings will last? Will it last for more than 15 years? And, forget normal expenditure, have you even considered the medical bills that will stack up? Or, what about other miscellaneous expenses? Signing up for a reverse mortgage loan can help you generate cash even in your retirement. How so? Well, if you don’t draw your loan for a long period despite taking out a maximum loan balance, the value of the loan will increase over time. Therefore, if the maximum loan balance is currently $50,000, it can triple to $150,000 after a decade.
- Reverse mortgage can help you delay social security benefits
There are many people who start collecting their social security benefits as soon as they turn two-and-sixty. When they do that, they miss out on the opportunity to enjoy full retirement benefits. Were you aware of the fact that the more you delay collecting your social security benefits, the bigger benefit you receive in the end? Reports published by the Internal Revenue Service state that the Social Security Benefit increases as much as 8 percent annually. If you sign up for a reverse mortgage plan, you will get access to immediate cash and that can, in turn, discourage you from collecting your retirement benefits as soon as possible.