For years now, reverse mortgages have been viewed by retirees as a last resort. The stigma around reverse mortgages indicates that they should only be taken out if ALL financial options are exhausted and you are in a state of desperation as a retiree. The truth, however, is that reverse mortgages are an ideal source of retirement income for many individuals and at the very least, a solid back-up plan.
Here are a few reasons why reverse mortgages ARE NOT a last resort for retirement finances.
- You’ve worked hard for the equity in your home.
The truth is, you’ve been working for your home since you bought it (and even before). You worked hard for your down payment, your monthly payments, for all of the upgrades and additions you’ve incorporated over the years. If you plan on staying in your home as long as possible, a reverse mortgage is the best way to reap the benefits of your hard work because you are able to access the equity you have earned.
- Reverse mortgages are a financial resource that cannot be taken away.
Once you apply for and are given a reverse mortgage, nothing can take your reverse mortgage away. You can go through hardships, dips in credit, and even the loss of a spouse and not lose the access you have to your reverse mortgage funds.
- Funds from reverse mortgages are flexible.
Funds from a reverse mortgage are yours to spend as you see fit. Popular options for utilizing reverse mortgage funds include starting a business, traveling the world, purchasing a vacation home, and helping to pay for unexpected medical expenses.
Of course, many financial advisors will educate you to use funds from a 401k or other investments before applying for a reverse mortgage to use as your primary source of retirement funds. However, if they don’t mention reverse mortgage as an additional option for funding some of your dreams, don’t be afraid to ask! Remember, you have worked hard for the equity you have earned – so use it!