Reverse Mortgage Blog

Decades ago, reverse mortgages were generally taken out by property owners who were 70 years of age or older. But even if you aren't in your 70s or 80s, a reverse mortgage may still be the best financial option for you. Today, many borrowers in their 60s are starting to look at reverse mortgages as a path towards financial stability and freedom. Those who take out a reverse mortgage only need to be 62 or older to qualify, which means many can qualify even before retirement. The Advantages of Taking Out a Reverse Mortgage Younger There are a variety of benefits to taking out a reverse mortgage in your younger years. For example, you can: Get access to the funds that you need — easily . A reverse mortgage doesn't require that you go through a credit check or that you have any equity other than your home. If you need money for medical bills or simply living expenses, a reverse mortgage can help immediately. Avoid selling your home. If you need cash and own property, your only choice is often to sell your home — and that leaves you without a place to live. A reverse mortgage lets you keep your independence and live within your home, while still being able to get cash now. With a reverse mortgage, you'll still own your home. Buy yourself time . Many people find that retirement is more expensive than they realize. A reverse mortgage will give you the time to figure out your financial situation and create a sustainable, long-lasting solution. Give yourself financial flexibility . If you're thinking about moving in the future or want to create a retirement lifestyle for yourself, a reverse mortgage can give you the cash you need to invest in it now. The cash that you get through a reverse mortgage can be used for anything, just like a personal loan. Even if you think you may be too young, keep these advantages in mind. Reverse Mortgages Are Growing in Popularity Reverse mortgages are becoming an extremely popular option for younger homeowners. Boomers, aged 62 to 64, are now over a fifth of those who are taking out reverse mortgages. For the most part, this is because: Boomers aren't afraid to take on debt . A reverse mortgage is just another financial instrument, and boomers have been able to wisely take advantage of these types of financial instrument for a variety of purposes: funding college tuition for family members, taking dream vacations, pay medical bills and renovating other homes. With interest rates low, this debt can be extremely useful to leverage. Boomers need help in their retirement . Many boomers have found that they simply were not able to save up enough for their retirement, especially due to housing market and investment crashes. Having cash can be preferable to having a property investment, especially for those who need money for their expenses now. Many boomers are still working and consequently are still shoring up their cash reserves; a reverse mortgage takes some of the pressure off. Boomers may need to downsize . Downsizing a home is easy with a reverse mortgage, as the funds from the reverse mortgage can be used immediately to purchase a smaller home outright, while still retaining ownership of a new home. For many families, this can be an ideal situation, as it allows multi-generational families to keep control of their property. Of course, taking out a reverse mortgage at a young age does mean that you may run the risk of depleting your cash reserves earlier. It all depends on your own unique financial situation. If you aren't certain whether a reverse mortgage may be the right option for you, contact Retirement Funding Solutions today. We can walk you through the process and what it could mean for you and your family.

With age, life only gets better. As a retiree, you have more time to travel, spoil your grandchildren, take it easy and do the things you love. However, with the average senior holding nearly $80,000 in mortgage debt, financial restrictions can make living your best life more of a dream than a reality, especially if you're struggling to maintain these payments. A reverse mortgage may be able to help. Learn what this mortgage solution can do for you. Understanding Reverse Mortgages Before you're able to understand how a reverse mortgage can help, it's best to first start with a clear understanding of what it is. In short, this option, also known as a home equity conversion mortgage ( HECM ) is a type of home equity loan. However, unlike traditional equity loans, reverse mortgages do not require recurring payments to satisfy the debt balance. This means you're able to remain in your home mortgage-free, while still satisfying smaller expenses like insurance and tax payments. When the borrower passes away or moves out of the property, the loan servicer then receives payment for the loan based on the sale of the home. Safeguard Your Health For homeowners 62 or older facing uncertainty when it comes to their mortgage payments, the consequences of potentially not being able to make each payment are significant. However, the consequences are particularly dangerous when it comes to your health. Financial woes bring about stress and lots of it. Over time, excess pressure can increase the risk for heart disease and Alzheimer's disease and bring about depression and anxiety. Preexisting conditions elevate these risks, as a limited income can leave you choosing between health care cost and mortgage payments. Calculate the fact that the average couple over the age of 65 can expect to spend more than $260,000 on healthcare costs after retirement, and it's clear to see how a mortgage concern can create problems. With the absence of a mortgage payment, you can limit your stress and make your healthcare needs the priority they deserve to be. Improve the Ability to Create and Protect Your Safety Net With a retirement comes a fixed income. This idea might be easier to grasp if retirement also came with fixed expenses. However, it's often the opposite. It doesn't matter how well you have planned and how diligent you've been with your spending habits, an unexpected event can cause you to tap into your savings. In addition to day-to-day costs, many people in their golden years still find themselves helping their children, tackling the cost of surprise vehicle repairs and facing increased medial costs due to the declined health of a spouse. For each of these incidents, having a financial safety net in place is helpful. But when you have a mortgage payment you're also struggling to make, you could find yourself pulling more out of your savings than you're able to put in. This can leave you unprotected. Luckily, a reverse mortgage can help you maintain your savings. Free Up Money for Home Renovations Your home is yours to enjoy, and it should be designed with your needs in mind. If you or your partner aren't able to get around with the same ease that you once did, access to modifications in the bathroom, along the stairwell and other spaces can increase safety and make your home more enjoyable. However, financial stressors can make it impossible to perform these upgrades. With the absence of a monthly mortgage payment, you can put more money towards accessibility updates and any other necessary and unexpected repairs. Even if you just want to make cosmetic improvements to your home, such as finishing the basement for your grandchildren, a reverse mortgage will give you more flexibility to upgrade your home in whatever way you want. A specialist at Retirement Funding Solutions can help you get on track to leading your best life. During a personalized consultation, a representative will discuss your needs and financial goals to assist you in finding the best solution for your situation.

WHEN THE HOMEOWNERS ARE DIFFERENT AGES You have to be at least 62 years old to qualify for a reverse mortgage. If you are past that age and your spouse is younger, you may be wondering what your options are. Here are five facts you may want to consider. 1. Reverse Mortgage Payments Can Be Larger When You're Older When setting up a reverse mortgage, the lender takes into account the value of the home, its equity and the age of the borrower(s). The older the borrower is, the larger the monthly payments from the reverse mortgage will be. Because of this, some borrowers prefer to remove the younger borrower from the deed and just take out the loan in the name of the older borrower. This decision can pay dividends in the short term, but it's a risky move for the long term. 2. Both Borrowers Should Always Be on the Reverse Mortgage When both borrowers are on a reverse mortgage, the home is completely safe until the last borrower moves out. At that point, whether the borrower has died, is moving into a nursing home or just leaving for another reason, the home gets sold. Then, the proceeds from the sale cover any remaining amount due on the mortgage, and the difference goes to the borrower (if still alive) or to the heirs (if the borrower has died). In contrast, imagine that only one homeowner is on the reverse mortgage and he or she dies. At this point, the other homeowner has just 90 days to repay the reverse mortgage and prove that he or she has a right to the house. It can be difficult if not impossible to come up with the funds, and as a result, this homeowner may end up losing the home. That's why it's critical to keep both homeowners on the deed and put both of them on the loan. 3. There Are Alternatives to Reverse Mortgages If you really need extra money, but both spouses haven't reached age 62 yet, you may want to explore other options. For example, you may want to consider a home equity loan or line of credit. This is a loan that is backed by the equity in your home. Depending on your financial needs, you could take out that type of loan for the next five to 10 years. Then, you could repay it and pursue a reverse mortgage when both of you are 62. However, it's critical to understand that there are key differences between these two products. 4. You May Want to Coordinate Social Security Benefits and Reverse Mortgage Payments Alternatively, if just one of you is 62, you may decide to take out your Social Security benefits early. It's important to note that you receive a lower amount if you start claiming on your 62nd birthday. However, you receive higher payments if you wait until you are 70. To that end, one spouse may want to take the reduced payments at their 62nd birthday. Then, when both of you turn 62, you may want to explore reverse mortgages, and finally, you may want to wait to claim the second partner's Social Security benefits until age 70. At that point, you can enjoy the delayed retirement credits. This is just an example, and you should always talk with a financial adviser to ensure you choose the right approach for your situation. 5. You Don't Have to Be Married to Get a Reverse Mortgage Together You don't have to be married to get a reverse mortgage. If you are living in your home with an adult child, a friend, a romantic partner or any other co-owner, you can also apply these facts in those situations. Want to figure out what option is the best in your situation? Then, contact Retirement Funding Solutions today . Whether both owners are over the age of 62 or not, we can help you figure out the best route forward for your retirement.

Homeowners are free to explore reverse mortgages at any time, but there are a few particular times when these lending agreements are especially helpful. If you're facing any of the following situations, now may be the right time to consider getting a reverse mortgage. When Retiring from Your Job Since reverse mortgages are often used as part of a retirement plan, it only makes sense to look into them when you retire from your job. You may find that taking out a reverse mortgage when you retire is a wise financial decision because it lets you delay withdrawing funds from other accounts or assets. By getting a reverse mortgage, you might be able to delay: Accepting Social Security payments Making withdrawals from a 401(k) or IRA Offloading stocks or mutual funds in other accounts Selling real estate that's appreciating quickly If any of these investments is gaining value faster than your home is, you'll be further ahead by using the equity in your home rather than the other assets to fund your first years of retirement. The other investments will be able to continue to grow, which will add value to your nest egg. Even if you decide not to get a reverse mortgage right after ceasing work, it's still worth investigating the options after you retire. You'll want to be familiar with all of the retirement funding tools that are available so you can make wise financial decisions throughout your retirement. What you learn about reverse mortgages may help you in 5, 10 or 20 years. When Facing a Major Unexpected Expense Anytime you face a major unexpected expense during retirement, it's a good idea to consider all of the ways that you may pay for the expense. For expenses that total thousands (or tens of thousands) of dollars, a reverse mortgage might offer a convenient and practical way to pay what you owe. Medical bills, of course, are one of the most common major unexpected expenses retirees face. Should you or your spouse face an unmanageable medical expense, a reverse mortgage may help you pay for the care that's needed. When Assuming Responsibility for Grandchildren If you're one of the few grandparents who become the primary caregivers of their grandchildren, you'll face increased expenses. According to a report from the United States Department of Agriculture, the cost of raising a child from birth to 17 years of age now costs $233,610. Even if you've saved for retirement, you may not be prepared for such a high expense. A reverse mortgage can help cover the cost of raising one or more grandchildren manageable. Whether you're fully retired, semi-retired or still working, a reverse mortgage that provides monthly payments will make managing a monthly budget easier. One that offers a large lump sum might be used to pay for college or other major expenses. In these situations, using a reverse mortgage to fund the raising of your grandchildren may decrease how large an inheritance you're able to leave them. It won't, however, decrease the legacy you leave with them. In fact, it'll increase the legacy because what you do for them when they're kids will have a bigger impact on them than any inheritance will. When You Don't Have Any Heirs If you don't have any person or organization you want to leave an inheritance or gift for, you might as well take out a reverse mortgage. Getting one will let you use the equity in your home, and there's no reason you shouldn't enjoy the value you've accumulated in your home. If you're interested in getting a reverse mortgage , contact us at Retirement Funding Solutions.

As you age, it's important that you develop a complete understanding of your finances and plan thoroughly for your future. After a long life of hard work, you should never feel as though you're forced to make sacrifices in order to be financially secure. That means taking advantage of the tools that are available to you, and your real estate is one of those tools. Unfortunately, many people are under the impression that cashing in the equity in their homes might require them to move out. Losing a place to live might seem like an unappealing way to improve your finances, so it's important that you turn to financial products that will allow you to stay right where you are. Below, you'll find a guide to some of the advantages of entering into a reverse mortgage. By selling your home back to the bank while still living there, you can balance your needs and be sure that your situation remains stable for the rest of your life. RETIREMENT FUND SUPPLEMENTING If you've carefully saved throughout your life and built up a nest egg for your retirement, it's important that you don't allow yourself to feel restricted by the possibility that it may run out. Hard work deserves a reward, so you should take steps to embrace the lifestyle you've always wanted while simultaneously being confident that your retirement funds will last. Your monthly reverse mortgage payments can act as an important supplement that increases the length of time that your retirement funds will last. By adding additional income every month, you can alter the rate of your retirement withdrawals to accommodate your changing circumstances. This should allow you to plan financially to guarantee more comfort and stability. STABLE RETURNS Over your lifetime, it's likely that you've experienced some fluctuations in financial markets that have left you with feelings of uncertainty. Even the value of real estate will increase and decrease with other changes in the economy, so when your retirement is at stake, it's important that you take the necessary steps to guarantee your returns will remain consistent. Reverse mortgages can offer you precisely the stability you desire. The rate you agree to with your bank won't change over the life of the mortgage, locking you in to consistent payments that you can rely on and factor in to your future plans. It's also important to remember that mortgage insurance is likely available from the government. This can provide an additional layer of coverage that makes sure you receive the full dispersal of your funds, and will help guarantee that you're not left holding the bag and struggling to reestablish firm financial footing. FINANCIAL FLEXIBILITY Ultimately, the most important financial goal for any senior should be the ability to have access to the money they've earned without having to jump through absurd loopholes. Having a variety of borrowing and dispersal options is the best way to accomplish this, and your reverse mortgage can certainly assist in that process. Some borrowers may prefer to receive a lump sum. Others might prefer monthly payments. Still others will adjust their access based on their needs at a given time. Whatever your financial situation, you can be confident that your lender can work with you to establish a payment schedule that meets your precise needs. The expertise in the field that you find at Retirement Funding Solutions should give you the confidence to navigate these financial waters. Our planning services will provide you with the information and security you need to guarantee that your future remains accessible and strong for many years to come.

Retirement is a wonderful part of life for many seniors, yet it can also be a time of life when they worry about money. If you struggle with having enough money for the things you need, you could look into reverse mortgages and home equity loans. As you examine both options, you may find that a reverse mortgage is a better option for most seniors. The Definition of Each Most people are familiar with home equity loans, yet many people are not yet familiar with reverse mortgages. Both options offer a way for you to tap into equity you have in the home you own, but both options work in very different ways. A home equity loan is like any other type of loan. You borrow a certain amount of money and must repay it with interest. Your lender might set it up for you to repay the loan in 10 or 15 years, but you must repay it. A reverse mortgage works exactly opposite. Your lender sends you payments each month, which come from the equity in your home, and you do not make payments on the money you borrow. In fact, you will only repay the loan when you move out of the house or sell it. Until that point, you will never have to repay any of the money you borrow from the equity in your home. The Requirements of Each There are two main reasons people choose home equity loans instead of reverse mortgages. The first is that many people do not understand the full benefits offered through reverse mortgages, and the second is that some people do not meet the age requirement for reverse mortgages. People only qualify for reverse mortgages if they are at least 62 years old . If you are younger than this, your only option to get cash might be through a home equity loan. If you are at least 62, consider looking into a reverse mortgage. The other key requirement of a reverse mortgage is you must have a lot of equity in your house. If you own the house outright, you should have no problem qualifying. You can also qualify if you owe very little on the house. Why a Reverse Mortgage Is Better After understanding the basic components of each program, you should realize that reverse mortgages offer benefits that home equity loans do not offer. The main benefit is that you do not have to make payments. If you do not currently have enough money each month to pay your bills, imagine having an income stream coming in each month from your reverse mortgage. Imagine too, not having to make payments on this income stream. It is the perfect solution for seniors who do not have enough income to live off each month. Secondly, your credit score will not impact your ability to qualify for a reverse mortgage. To qualify for a home equity loan, your lender will need to see a good credit score. If your credit is less than perfect, this is not likely to prevent the lender from approving your loan. Another key benefit is that the income you receive from the reverse mortgage is tax-free income. In other words, you will not incur taxes that you must pay each year on the money you receive. If you worry each month about your bills and having enough money to survive, now might be a good time to consider taking a reverse mortgage. You can learn more about reverse mortgages by contacting Retirement Funding Solutions. We offer several locations, convenient hours, and information about your unique financial situation.

Life expectancies are higher than they have ever been, and to support themselves through a long retirement, many people turn to products like reverse mortgages. Wondering if a reverse mortgage is right for you? Here are five signs that you may want to consider one or at least get more information. 1. You Own Your Home or Have Substantial Equity The key requirement for a reverse mortgage is that you own your home or have substantial equity in it. In the simplest terms, a reverse mortgage is when a bank buys your home from you. The bank bases the payments on the value of your home or equity, and it structures the mortgage so that you receive equal payments for the rest of your life. Note that if you don't want regular payments, you can opt for a reverse mortgage line of credit. Also based on the value of your home, you can use this credit line as needed. Of course, banks have no idea how long you are going to live. To estimate that, they use actuarial tables that's the same method insurance companies use when setting up life insurance policies. If you die or need to move to a nursing home before the bank has repaid you the whole value of the home, don't worry, the extra funds all revert to you or your heirs. 2. You Are Over the Age of 62 In order to take out a reverse mortgage, you must be at least 62. Ideally, if you have a spouse, you should wait until both of you are over the age of 62. Taking out a reverse mortgage in only one spouse's name can be problematic for the other spouse if the account holder dies. 3. You Need to Boost Your Retirement Income Because a reverse mortgage provides you with regular payments, it can be an effective way to boost your retirement income without forcing you to move out of your home or drastically change your lifestyle. Many borrowers use reverse mortgages to boost retirement savings accounts or pension income. You can also use a reverse mortgage to delay taking social security payments. If you start taking your benefits at age 66, you receive full benefits. However, if you delay taking payments until you are 70, you receive 132% of your payments. For example, if your full payment is $1,000 per month, you will receive $1,320. 4. You Need Money for Home Repairs In addition to using reverse mortgages to boost their incoming money, some borrowers also use reverse mortgages for specific expenses, such as remodeling their homes. For instance, if you need to make modifications because you are in a wheelchair or cataracts have affected your vision, a reverse mortgage can help to pay for those changes, while still allowing you to stay in your home. 5. You Can Afford Other Home Bills Although a reverse mortgage can help in a lot of financial situations, it's also important to ensure that you can afford your other obligations. As a reverse mortgage holder, you remain responsible for home upkeep expenses such as repairs; you also have to cover property taxes and utility bills. Of course, you can use your reverse mortgage payments to cover some of those bills, but it's critical to ensure that all of these expenses work with your overall budget. If you can't afford those expenses, you may want to consider downsizing and moving to a less expensive home. Surprisingly, you can also use a reverse mortgage to buy a new home. In these cases, you pay off your existing home with the reverse mortgage and you use the remaining proceeds to buy the new home. If several of these points apply to you, contact Retirement Funding Solutions today. Thanks to our 40-plus years of experience, we can answer your questions, and we're happy to do so.

Reverse mortgages can be a useful way to leverage your home equity to boost your income during your retirement. Unfortunately, there are several myths that have circulated about reverse mortgages, and as a savvy consumer, it's important to understand the truth behind those myths. Here's a look at four myths you may have heard and an explanation of the truth behind them. 1. You Can't Get a Reverse Mortgage if You Already Have a Mortgage While it's true that many reverse mortgages are given to homeowners who have already paid off their mortgages, this is not the only option. If you have an existing mortgage, you may be able to get a reverse mortgage—it depends on how much equity you have in your home. For example, imagine you owe $50,000 on your home but your home is worth $200,000. In this case, you may be able to get a reverse mortgage for the value of the home. You can use the mortgage to pay off the existing loan and then arrange to receive the rest of the payments periodically. Some borrowers even use this type of reverse mortgage to buy a new home, which can be a great option if you're ready to downsize or move to a retirement community. 2. Reverse Mortgages Affect Social Security Payments When you get a reverse mortgage, you receive payments based on the value of your home as well as several other factors. This increases the amount of spending money you have, but such a change does not impact Social Security payments or Medicare insurance. On the other hand, if you receive Supplemental Security Income (SSI) or other benefits such as food stamps, your eligibility for those programs may be affected by your reverse mortgage payments. However, if you are getting funds from a reverse mortgage, you may not need those programs. It's important to crunch the numbers to ensure you're making the right decision for your personal finances. 3. Reverse Mortgages Cover All Home-Related Bills Essentially, when you take out a reverse mortgage, the bank is buying your home from you and paying you in monthly instalments. Of course, based on the terms of the mortgage, you are always allowed to stay in the home until you move out or die—without exception. That said, the monthly payments are only related to the value of your home. As the homeowner, you are still responsible for other home-related expenses. That includes property taxes, utilities, and upkeep, but of course, you can use your reverse mortgage payments to cover those bills as needed. 4. Reverse Mortgages Are Scams The belief that many—if not all—reverse mortgage are scams is one of the worst reverse mortgage myths. Unfortunately, some scam artists have pretended to offer reverse mortgages to seniors. According to the FBI, this has happened all over the country with particular prominence in areas with high senior populations, such as New Jersey and Florida. The scams have taken multiple forms, but they have always been perpetrated by outsiders, and they don't reflect the values of the reverse mortgage industry. To ensure you are not the victim of a scam, never take out a reverse mortgage on behalf of someone else—especially a stranger you don't know. It's also critical to work with a HUD-approved lender with an A+ rating with the Better Business Bureau. They can guide you through the process, answer your questions, and ensure you get a loan that really works with your finances. If you're curious about reverse mortgages and want to learn more, contact Retirement Funding Solutions today. We bring over forty years of honesty and experience to the table, and we're happy to listen and answer all your questions.

While many may prefer to leave milestone birthdays behind after age 21, these birthdays can come with tangible financial benefits during your later years, such as becoming eligible for early Social Security benefits at 62, qualifying for Medicare at 65, and reaching full retirement age at 67. Those who have reached early Social Security age are also old enough to take out a home equity conversion mortgage (HECM) or "reverse mortgage". But while most individuals may be aware of this option, few pay much attention to the upper age limits for this type of loan. In some cases, the parents (or even grandparents) of a 62-year-old homeowner seeking a reverse mortgage could also qualify. Read on to learn more about how your age can impact your ability to take out a reverse mortgage, as well as some other factors that may drive this decision. HOW OLD IS TOO OLD FOR A REVERSE MORTGAGE? Eligibility requirements can vary by lender (and from state to state), but few reverse mortgage lenders have any hard-and-fast age maximums. In fact, one lender reported extending a reverse mortgage to an octogenarian borrower and her 101-year-old mother who shared a home. Because reverse mortgage lenders rely in part on actuarial tables that can predict lifespan when extending loans, older (and thereby less risky) borrowers can often qualify for even more favorable terms than might be available to younger borrowers. However, age can also make reverse mortgages more risky for older borrowers, as the odds of you spending the next two decades in your home (mortgage-free) when you're 85 are somewhat lower than when you're 65. While reverse mortgages can still be a wise investment for those in their seventies, eighties, and beyond, it's worth considering a few key factors first.