Last month, we covered how reverse mortgages have quickly become reliable tools for the new wave of ‘pandemic retirees’ who qualify and look to age in place in their homes.
This month, we cover the age-old question of reverse mortgages: When do they make sense?
Whether you’re looking for guidance for a client – or yourself – here are 4 scenarios where a reverse mortgage may make the most sense as a way to bolster your retirement income.
Read on to learn more and be sure to reach out to a Certified Reverse Mortgage Professional for help and advice in your particular scenario.
Leverage a Reverse Mortgage Instead of Tapping Into Retirement
If you’re retired or nearing retirement, you probably have at least a small nest egg you’ve worked hard to save for in your working years. The decision to tap into that still-growing nest egg (however small) is a difficult one. It can be a smart one, however, and it’s a decision many of our clients make.
A reverse mortgage can be relied upon in lieu of using hard-earned retirement — helping that egg maintain its growth for longer. The reverse mortgage payments can be used to cover regular living expenses, house maintenance, and those from unexpected life changes, like the death of a spouse and an abrupt income change as a result.
Use a Reverse Mortgage to Help with Emergency Expenses
Unexpected emergency expenses can wipe out even the healthiest retirement accounts. A recent study found that the average cost of an emergency room visit may be as much as a mortgage payment. From covering medical emergencies, ongoing healthcare expenses that multiply, helping adult children with emergency expenses or grandchild needs — the potential monetary burden can add up.
A reverse mortgage may be an ideal alternative to cover life’s unexpected twists and turns and safeguard your other investments for future use. It can also potentially eliminate any need for you or your spouse to re-enter the workforce to generate more income.
Tap into a Reverse Mortgage to Maintain Your Home
Houses age and maintenance is often a huge expense that is necessary to protect your investment. In addition, like emergency medical issues, the need for a costly home repair often happens on a whim, but needs attention now. Your air conditioner might break at the height of summer. In Louisiana, a hurricane might hit and cause damage. Maybe your roof needs quick repair or a plumbing issue needs a fast fix.
A reverse mortgage line of credit can help offset these repair costs and make them easier to bear – all without a monthly principal and interest payment. You’ll also be fulfilling an important requirement of the program: keeping your home maintained.
Lean On a Reverse Mortgage in the Time of COVID Uncertainty
For some nearing retirement age or at retirement age, the uncertainty of COVID-19 has accelerated a few decisions. Many immunocompromised seniors are choosing to retire earlier (if they can) to stay safer from the virus and aging in place at home. Moreover, in these situations, if retirement income needs to be cushioned, the idea of staying in the workforce part-time isn’t the wisest, given the risks of the pandemic.
A Reverse Mortgage is Your Secret Weapon
The reverse mortgage has emerged as a tool to make earlier retirement and a safer senior lifestyle possible.
All of these scenarios challenge the myth that a reverse mortgage is a loan of last resort. It’s not! Think of it as a solid backup plan for a comfortable and safe retirement.
Reach Out to a Certified Reverse Mortgage Professional with Your Questions!
There are many moving parts to understand with reverse mortgages. If you’re considering a reverse mortgage for yourself or for a client, reach out to a Certified Reverse Mortgage Professional for answers to your questions. We can help evaluate your financial situation and work with you to determine if a reverse mortgage makes sense for your scenario.