Most American adults spend a considerable chunk of their lifetime income servicing the mortgage on their home. High-interest rates, fines, penalties, and private mortgage insurance often drive up the cost of such mortgages.
As a result, home loans take much of the monthly income, drastically reducing the amount of money left. To this end, most retirees have little in the way of retirement savings, and it leads them to suffer financial difficulties.
Luckily, you can take charge of your finances even in the old age with the help of credible reverse mortgage brokers such as Primary Residential Mortgage, Inc.
Leverage the equity in the home
Once you’ve attained the age of 62 years, then you can leverage the amount of equity in your home and improve your financial situation. Unlike the regular mortgage, such a loan doesn’t come with monthly repayments.
Instead, the lender lets you borrow money against the house, but won’t collect on the debt until you vacate the house or you meet your demise. As risky as that might sound, it’ll significantly improve your finances. Your lender can advance you a line of credit to meet your daily needs.
In other cases, you can take a lump sum and tend pressing emergency such as replacing a leaky roof.
Escape a bad market
If much of your retirement fund is in the bond and stock market, you can use a reverse mortgage to escape bad market. During a market downturn, your stock holdings might hit rock bottom, losing a considerable chunk of their value. The last thing you want at such a time is to cash out.
Cashing out when the market is at the bottom could cost you a fortune and ruin your finance. Leveraging your home equity for a line of credit can help you ride out the downturn without compromising your portfolio.
After spending a lifetime building equity in your home, you can leverage that equity to secure your financial freedom in retirement. A reverse mortgage can ensure that you lead a happy and fulfilling life after the age of 62 years.