Cover Living Expenses With A Reverse Mortgage

Most seniors and retirees take out a reverse mortgage to assist them stay in their present home as they get older.

Reverse mortgages used to be considered a cash-flow option of last resort. That perception is changing, due to new regulations that have made them safer, as well as new cash-flow strategies that appeal to younger retirees. Still, a reverse mortgage remains an expensive option that requires careful consideration.

Reverse mortgages used to be considered a cash-flow option of last resort. That perception is changing, due to new regulations that have made them safer, as well as new cash-flow strategies that appeal to younger retirees. Still, a reverse mortgage remains an expensive option that requires careful consideration.

Reverse mortgages tap into a resource that would otherwise be hard to use. Before these kinds of mortgages existed, getting at one’s stored up home equity required selling the house or taking out an equity line of credit. Reverse mortgages have grown in popularity over the years. There’s an expectation for ever more demand as more and more baby boomers retire.

Borrowers usually get a fixed-rate, lump sum loan, which goes toward the house purchase. The balance starts accruing interest almost right then. You can leave some reverse mortgage proceeds in a line of credit for future use by taking an adjustable-rate loan, and you will owe interest only on the proceeds you use.

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