Reverse mortgages are a type of mortgage that can be used to solve immediate needs or plan for the future. The purpose of a reverse mortgage always depends on your individual situation.
While there is a wide range of ways for you to use a reverse mortgage, here is a list of six ways people use reverse mortgages.
Pay off Your Existing Mortgage
You can use a reverse mortgage to pay off an existing mortgage and you won’t be required to make any monthly payment.
Even when your traditional mortgage is paid off, you still have to pay your property taxes, insurance, and home maintenance cost to avoid foreclosure.
Make Home Improvements
As our home gets older, some parts may require special attention. Parts such as the roof, pipes, and appliances may require an update or a full replacement. A reverse mortgage can be used to pay for – or curb this cost.
Allow Other Assets to Grow in Value
Like a reverse mortgage line of credit, your other retirement assets can grow in value and provide access to more money when they are left to increase.
An example of this is social security. If you need cash to survive with while you avoid touching money from other assets, you can use money from your reverse mortgage.
Purchase a Home
You can use your reverse mortgage to purchase a home without having to make a mortgage payment for as long as you live in the home. However, you would be required to make a down payment.
You would also be required to pay property taxes, insurance and maintenance cost on the new home.
Create an Emergency Fund
Unexpected expenses can drain your savings. When you get a reverse mortgage you don’t have to touch your savings. You can have a fully-funded emergency resource available right away.
Many seniors want to travel more after retirement, but this can be very expensive – depending on the location. A reverse mortgage can be used to fund this adventure. However, responsible use is recommended.
There are a lot more you can use a reverse mortgage for. If you want to learn more, give our licensed professionals a call today.