With an ever-increasing cost of living, many seniors have started to feel that they are unable to fully enjoy retirement. However, that doesn’t have to be the case. Using the equity in your home can drastically change your financial situation and quality of life. If it sounds too good to be true, it’s not. You can take advantage of the equity in your home by getting a reverse mortgage.
What is a reverse mortgage? A reverse mortgage is a type of loan that uses your home as collateral. The amount of the loan is based on the equity your property has accumulated. A reverse mortgage loan does not require monthly payments because the interest is added to the principle, increasing the overall loan balance. The loan doesn’t have to be paid back until you sell your home, it’s no longer your permanent residence, you pass away, or if you fail to uphold the loan terms.
There are many reasons to get a reverse mortgage, including:
1. Pay off Your Mortgage & Debt
A reverse mortgage loan’s primary purpose is to pay off your mortgage, relieving the stress of making monthly payments. A portion of the loan is also allocated toward repairs to your home, property taxes, and homeowner’s insurance. It can also be applied to credit card and other debts that take up the majority of your monthly budget. Once you have paid these debts off, you should make sure you have a plan in place to prevent more from accumulating.
2. Increase Your Financial Freedom
Using the equity in your home can help you achieve financial freedom. Without these expenses consuming your income, you can enjoy an increased cash flow that can be used toward enjoying your life more. Instead of constantly worrying about exceeding your budget, you can use your savings toward the things that bring you joy. From planning a trip to see your family in another state to finally taking that vacation to your dream destination, reducing your financial burden can allow you to make the most of your golden years.
3. Afford Medical Treatments
Many seniors are faced with the unfortunate reality of expensive medical treatments to maintain their health. If you are vexed over how you are going to afford the treatment you or your spouse needs because it exceeds your savings, you should consider using the equity in your home. The large sum you could receive can help you ensure you receive timely care while simultaneously reducing your mortgage expense, allowing you to focus primarily on your health.
4. Renovate Your Home
Whether your house has become dated, no longer suits your needs, or is not equipped with the necessary amenities you need, a remodel can drastically improve the usability and overall state of your home. Popular improvements are usually safety and comfort-oriented, such as motion-activated lighting, shower adjustments, specialized alarm systems, and stair lifts. However, if you have always desired a reading nook overlooking your garden, you can make those types of changes too. Having the means to renovate your home allows you to age in place and enjoy the home you’ve made your memories in.
5. Care for Those You Love
As a mother and grandmother, you may desire the ability to do more for the ones you love. A reverse mortgage can empower you to help fund your grandchild’s college so they can get the best education available instead of having to pass up on the opportunity of a lifetime due to lack of financial aid. There are many expenses that can create hardship for you and your family, but freeing yourself from your mortgage can allow you to have the financial resources you need to support them if needed.
6. Improve Your Quality of Life
Finding yourself in a good financial position and without the limitations of a monthly mortgage payment can significantly reduce your stress and allow you to improve your quality of life in nearly every way. From spending more time with your family to forgoing the struggles that come with a home that does not fit your physical capabilities. You and your spouse can enjoy your retirement to the fullest by making the choice to get a reverse mortgage.
The first step to making the most of the equity you have accumulated in your home over the years is education. Find out the value of your reverse mortgage loan will be, it is likely that it will be enough to make some positive changes in your daily life.