What Are The Benefits Of A Reverse Mortgage?

A reverse mortgage is a financial option many seniors turn to in their retirement. A reverse mortgage allows you to borrow money against the value of your home and tap into your home’s equity. While this option isn’t for everyone, there are many who can access increased protection, comfort and flexibility, as well as grow their income. Depending on your current and future financial situation, you could also reap the below benefits of a reverse mortgage:

Stay in your home

If you’ve spent a significant portion of your life maintaining and caring for your home, you might not be interested in moving again. A reverse mortgage allows you to live in your home for the remainder of your life – as long as you abide by the terms set out in the loan and pay taxes and insurance. As well, a reverse mortgage has no impact on your home ownership.

No monthly payments

The burden of monthly mortgage payments can weigh on many people during retirement. With a reverse mortgage, you’ll no longer have to make monthly payments. Instead, you’ll receive funds as part of the loan. Once your home is sold, or if you move, the loan is repaid.

Protection

Reverse mortgages are federally insured which offers many avenues of protection. A reverse mortgage protects you and your home if the housing market were to decline or if the loan amounts to more than the value of your home’s selling price. As well, your home won’t be defaulted for non-payment as lenders cannot claim your assets. Lastly, your social security and medical benefits will be unaffected by a reverse mortgage.

Flexibility

There are various payment options to suit your financial situation. You can receive payments in full or partial, through a line of credit, in monthly payments, or a combination of these options. You can also tailor your reverse mortgage to suit your financial needs. As well, you typically have full control over how you use your funds, whether you save or spend it.

All of the above benefits will help you to live more comfortably in your senior years while also saving or growing your wealth. The ability to stay in your home without the burden of monthly mortgage payments, as well as added protection and flexibility, makes reverse mortgage an attractive financial option for seniors. Keeping these benefits in mind, speak to a trusted advisor to decide if a reverse mortgage is right for you.