Home equity can be a godsend to people who need some extra money in near retirement or retirement ages. Americans may have more net worth wrapped up in their homes than in retirement and financial accounts. Enterprises TV offers some tips for people who may want to tap into their home equity to better fund their retirement.
A USC report reported that by the end of year 2015, less than one percent of Americans age 62 and older had taken out a reverse mortgage. This type of mortgage is a financial tool that lets people borrow against their home equity and not repay the loan until they sell the house/home or die. This industry, however, has been tightly regulated in recent years. It pays to do some in-depth research on the companies that offer them first.
The homeowners who have paid off their mortgage loans and are living mortgage-free, and who have not taken a reverse mortgage loan, can use home equity funds later if the money is needed for medical and other expenses. Enterprises TV encourages readers who may plan to take a reverse mortgage loan to consider all aspects of adding this financial step in pre-retirement or retirement years.
Would it better to sell the mortgage-free home and move into a small home, such as a condo or a smaller house?
Would it better to live in your own mortgage-free home and use the funds from a reverse mortgage loan to pay for unexpected medical or living expenses not covered by insurance?
Financial advisers note that a reverse mortgage is best for people who want to stay in their current home for the rest of their lives. Home equity loans can also be obtained from various financial institutions.