Should seniors tap into home equity to help with retirement?

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Should seniors tap into home equity to help with retirement?

We spend our whole lives trying to accumulate net worth. And for many people reaching retirement, a significant portion of their net worth is tied to their home equity.

But is this still the best way to go?

Should seniors be looking to protect their home equity? Or is it a good idea to tap into home equity to help with retirement?

The answer is – it depends. But the trends are changing quickly.

Given the strong stock market and increasing home values, seniors are sitting on more home equity than ever before.

Traditional ways of accessing home equity include: 

#1 – Selling your home

Many seniors look to downsize, and arguably there’s never been a better time to sell. However, selling also means buying in today’s hot market. 

#2 – Refinancing or Lines of Credit

Traditional mortgage rates are near historic lows, but these loans require qualifying income which may not always be an option for seniors in retirement. Plus, borrowers have a required monthly mortgage payment.

#3 – Reverse Mortgages

One of the reasons reverse mortgages are growing in popularity is that it gives you access to the cash in your home but without the required monthly mortgage payment.

In other words, reverse mortgage loans give seniors the ability to live in their home, with no monthly mortgage payments, by converting home equity into cash while still maintaining ownership!

Reverse mortgages can also be used to pay off debt, cover the cost of medical bills and prescriptions, do home repairs and modifications, and much more. Why tap into savings when home equity can be used instead?!

Seniors often have many questions about reverse mortgages, and we’d like to help ensure you have all the facts when talking to your clients and loved ones about how reverse mortgages work.

Please get in touch today to find out more.