Retirees Can Consider Reverse Mortgages
If you're new here, you may want to subscribe to my RSS feed. Want more frequent updates follow me on Twitter. Thanks for visiting!
It seems like an odd concept: you spend most of your life paying off your mortgage so that you own your home. Then, when you retire, you can do the exact opposite - take a reverse mortgage and have the bank pay you instead.
Reverse mortgages are becoming more common and currently account for about 1% of all mortgages in the United States. They are usually available for homeowners who are 62 years old or more, and have a reasonable amount of equity in their home, or perhaps own it outright.
Using your age and expected life span, the bank calculates a payout it is prepared to make to you - possibly in a lump sum, but often in regular payments. The idea is that you will then be spending the equity in your home throughout your retirement years, and at the end of your life, your home can be sold to pay back the bank. This means that a reverse mortgage is best suited for retirees who plan to continue living in the same house for the long term.
That’s just a really brief summary of a reverse mortgage product - you have to consider them really carefully to decide whether or not they’re right for your situation. But if your retirement savings aren’t allowing you to live how you’d like, looking into a reverse mortgage might make sense.
photo credit sxc
Tags: calculators | Mortgages | Retirement | savings
This entry was posted on Friday, March 21st, 2008 at 5:58 am and is filed under Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
