Planning for your retirement is essential, especially if you want to live well once you retire. Social security doesn't provide nearly enough to live comfortably during retirement. In some cases, social security payments aren't even enough to pay your basic living expenses. That's why it's so important that you have other avenues available for you to provide for your financial well-being during retirement. That's where a reverse mortgage may be beneficial to you. Reverse mortgages provide you with a lump-sum of cash, or a line of credit, that you can use as you would like. Once you pass away, your home will be sold to pay off the reverse mortgage. Here are three criteria that will help you decide if a reverse mortgage is right for you.
You're Planning to Age in Place
As you age, you start thinking about your future, specifically the time when you're no longer able to care for yourself. While some people choose to transition to an assisted living community, others choose to age in place. If you've decided that aging in place is best for you, a reverse mortgage will allow to your pursue those plans. You can use the proceeds from your reverse mortgage to upgrade your home, and make the changes that you'll need.
You Own Your Home
In order for a reverse mortgage to be beneficial, you need to own your home. That's because the amount you receive from the reversal will be determined by the value of your home, minus the amount you owe on it. If you have a high mortgage value on it, you might not get enough out of it to be considered useful. However, if you own it outright, you'll be able to take out a reverse mortgage for the value of your home. That can go a long way towards providing a comfortable retirement.
You Have Additional Income
Once you take out a reverse mortgage on your home, you won't have a mortgage payment to pay each month. However, you will still need to pay for property taxes, homeowners insurance, and maintenance. If you don't have an additional source of income, those costs could take a considerable chunk out of the funds you receive. Before you decide on a reverse mortgage, make sure you'll be able to afford the continued expenses.
Don't leave your retirement to chance. Talk to a financial consultant, such as Senior Mortgage Solutions, about the benefits of taking out a reverse mortgage on your home.