Reverse mortgages are among the most flexible and affordable lending products available to seniors. You can supplement your income using a reverse mortgage that you receive as a lump sum, in installment payments, or as a line of credit. The loan does not come due until a maturity event like the sale of the home or the death of the last borrower.
While some borrowers take out reverse mortgages to go on vacations or put in a hot tub, there are many practical ways you can leverage the supplement to your income a reverse mortgage provides to make your retirement more affordable. Let’s go over a few.
- Pay off your mortgage. One of the main reasons to apply for a reverse mortgage is to finish paying off your existing mortgage. Not only that, but if you have a second home, you could also use your reverse mortgage to pay off that mortgage.
- Pay off high-interest loans. If you are carrying other high-interest debts, it is a good idea to prioritize paying them off using the funds from a reverse mortgage. You will save up all of the money you would have otherwise paid in interest over the remaining lifetimes of those loans. Additionally, you will breathe a sigh of relief knowing you no longer have to deal with those debts.
- Build an emergency fund. Unexpected expenses can arise at any time during retirement (medical bills being a common example). If you have some money stockpiled for those situations, it can go a long way toward helping you keep your finances stable. Think about using a reverse mortgage to create an emergency fund.
- Downsize. Maybe there are some things in your life that you could stand to downsize. Say, for instance, that you have a second home that is expensive. You have wanted to sell it for a long time, but moving all of your stuff from that home to another was too costly. You can use reverse mortgage funds to finance those moving costs, allowing you to finally sell the second home and buy a less expensive one instead.
- Make your home more energy-efficient. How much are you currently paying for heating, cooling and electricity? With the supplement to your income from a reverse mortgage, maybe you can afford energy-efficiency upgrades that will save you money on your utilities over the long run.
- Invest. Finally, one more way you may be able to make your retirement more affordable using a reverse mortgage is to invest the funds. Then they will have a chance to grow, supplementing your income even more.
Apply for a Reverse Mortgage in San Diego
During your reverse mortgage consultation, I can share additional ideas with you for how you can use this supplement to your income to reduce your expenses and increase your financial comfort and stability. To ask your reverse mortgage questions or apply now, please call (619) 857-7191.
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