A friend of mine had paid off his home and had no mortgage. He felt he had done well, and he should feel proud of his accomplishment. It took faithfulness and sacrifice to achieve that mile marker. His home was his greatest asset, and yet the money that was in the home, his equity or housing wealth, was tied up with no way to access it without a payment except by selling. If he sold his home to access the money, where would he live?
Many people are in the situation where they are “house-rich, and cash-poor.” They have paid off the house, but are not enjoying retirement due to the constraints of a fixed income. The equity in your home is YOUR money. Why not put it to work for you?
A Home Equity Conversion Mortgage converts some of your equity into a usable asset – either as a lump sum, a guaranteed growing line of credit, a monthly income stream, or a combination of the three. The line of credit will grow at about 5% a year compounding annually creating a nice nest-egg for the future.
The amount of equity you can draw is established by the age of the youngest borrower, the value of the property and what is owed, which in your case is zero. Substantial equity always remains in the home. This is your equity. No one owns the home but you, and you will the property to your heirs who never inherit any debt.
The house you paid into for so long becomes an asset that pays you back for the rest of your life. Call your local Reverse Mortgage Specialist for the specifics of how this will benefit you. You owe it to yourself and your family to know your options so that you can live your best retirement.
This article first appeared in My Primetime News, December 28, 2018.