The New Reverse Mortgage can help you avoid retirement landmines
This is not your parent’s retirement and there are landmines beneath your feet.
With Social Security funding issues around the corner, uncertain market conditions, long-term low interest rates and skyrocketing medical costs, American retirees are facing a minefield of retirement challenges and who among us has that map?
What do you want from your retirement?
If you ask most retirees or pre-retirees what they want out of retirement, I think most would say “Peace of mind, I’m just looking for a safe and secure retirement.”
The only certainty is that our retirement is going to be dramatically different than the retirement previous generations encountered.
To achieve that goal you’ll have to make some tough decisions about when to retire and when to collect Social Security, how to manage your retirement savings and how to address your housing needs in retirement.
Unfortunately your housing needs gets the least amount of attention when in fact, for most Americans, it is their most valuable asset. Fortunately it is also their most versatile asset and therein lies the map to avoiding retirement landmines. It could be the difference maker in ensuring a safe and secure retirement.
Is a Reverse Mortgage my only option?
Because our generation (baby boomers) is more likely to carry mortgage debt into retirement than previous generations, we’re facing some challenges previous generations never had to consider.
That mortgage payment while not a burden in your pre-retirement years may suddenly become a huge burden in your 70s and 80s.
How can I unlock my trapped equity?
There are a number of options available for today’s homeowners and all have their benefits and drawbacks.
Cash out refinancing and home equity lines of credit allow a homeowner to tap into their equity, sometimes with little to no cost.
The drawback, however, is you will still be looking at making a mortgage payment well into your 80s. On a fixed income for many that could be a problem if you’re relying solely on SSI and pensions.
Today’s tougher qualifying standards may make these options unattainable for retirees who are relying on Social Security and pensions for their qualifying income.
How is the New Reverse Mortgage different?
Without question a Reverse Mortgage is a more expensive alternative to use your equity. But qualifying for it is less demanding than with a traditional mortgage.
What is financial assessment?
Reverse Mortgage lenders are required to perform a “financial assessment” to ensure your ability to continue to pay your property taxes, homeowner’s insurance and housing related expenses. But there are no debt to income qualifying or credit score requirements with The New Reverse Mortgage.
The New Reverse Mortgage is more than just a loan program. It is a financial lifeline and its value to you will be determined in 5, 10, even 20 years by its contribution to meeting your retirement objectives.
You can use the New Reverse Mortgage to provide you with a Personal Retirement Paycheck for a fixed period of time or for the entire time you live in your home. You can also use it as a “bonus check” to help cover unexpected expenses or just to treat yourself to something special.
The New Reverse Mortgage isn’t for everyone…but it could be!
How do I know if The New Reverse Mortgage is right for me?
If you’re still wondering if a Reverse Mortgage is the right solution for you but you’re not ready to sit down with one of our Reverse Mortgage Experts, then we’ll be happy to mail (or email) you Use Your Home to Stay at Home which is the official federally approved consumer booklet for those considering a reverse mortgage.
Some of this information first appeared on Forbes.com