Studies have shown that over 50 percent of those approaching or at retirement age simply do not have enough savings required to maintain their pre-retirement lifestyle. Utilizing home equity to fund longevity is a practice financial experts regularly tout. But seniors need not sell the family home in order to do this.
Reverse mortgages allow those 62 or older to convert their home equity into cash while also eliminating monthly mortgage payments. Borrowers maintain ownership and are only required to upkeep the home and maintain homeowners insurance.
Proceeds from a reverse mortgage can be distributed in a way that works best for the homeowner, either a monthly payment, a lump sum or a line of credit which can continue to grow over time.
Today, conventional conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent while 15-year rates are near 3.375 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.