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6 Different Ways to Use a Reverse Mortgage [INFOGRAPHIC]

Posted by The Aramco Group on Wed, Oct 4, 2017 @ 09:10 AM

Reverse mortgages offer the older homeowner a unique opportunity to borrow against their hard-earned equity. Those over the age of 62 who own their property outright or have majority equity in their homes can convert their equity into a lump sum, line of credit, or monthly payment. This prospective opportunity can help seniors put money towards debt, resolve income challenges, or pursue other financial interests. Here are 6 ways seniors are currently using reverse mortgages every day to improve their lives.

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Supplement Income

    • Pay off forward mortgages to increase monthly cash flow
    • Create an income bridge after retirement and delay claiming social security
    • Replace a home equity line of credit and drop monthly loan repayment requirements

Make Age Accommodations

  • Remodel the home to account for aging limitations
  • Pay for long-term care needs and assistive devices and technology
  • Pay for in-home care or short-term medical assistance such as physical therapy

Create a Cash Reserve

    • Protect a portfolio with a cash reserve to draw from during market changes
    • Pay off large debts such as credit cards, medical bills, or auto loans
    • Pay for health insurance until Medicare kicks in at age 65

Focus on Family

    • Help family with emergencies, higher education, or other financial needs
    • Pay for estate planning or will preparation
    • Compensate family members for help with senior care and household needs

Improve Your Quality of Life

    • Pay for a driver once you are no longer comfortable driving
    • Take a vacation or increase a monthly entertainment budget
    • Purchase leisure items such as a boat or entertainment system

Downsize to a More Affordable or

Accessible Home (A 3-Step Process)

    1. Use home sale profits or savings to make a significant down payment
    2. Take out a reverse mortgage to pay off remaining home cost
    3. Use cash freed from monthly mortgage payments for savings or supplemental income

 

Topics: Reverse Mortgage, Cash Reserve, supplementing income