Your parents have always been thrifty. They helped you through college. They were very careful about saving for retirement, but lately, you notice that they aren’t going out very often. They are very careful when they shop and often complain about the high fuel cost or utility bills. Your parents are not alone. Even some of the best-laid plans can come up short. Their nest egg might fall short with medical costs rising in the double digits, exponentially rising fuel costs, and a challenging investment environment.
Traditionally, retirement plans have included Social Security, pensions, and personal savings. But pension plans are becoming underfunded, and benefits are being cut. As a result, many seniors are relying more on their nest egg to get by. While this may be enough for some, others are struggling, even with additional help from their children.
Fortunately, there is a potential solution for those who own their homes. Reverse mortgages are a type of loan specifically for seniors that can help them access the equity in their homes. While they may have had a bad reputation in the past due to predatory lending practices, the federal government has now heavily regulated these loans, making them a safer option for seniors.
To qualify, seniors must be 62 years or older; there are no payment requirements for the life of the loan. The loan amount is based on the senior's age, the value of their home, and their home's location. If there is an existing mortgage, it must be paid off out of the loan proceeds. The loans are flexible and safe, with few credit requirements. Additionally, funds can be taken as cash, credit line, term, or tenure payment.
Reverse mortgages can make the difference between struggling to make ends meet and being able to live comfortably in retirement. With a reverse mortgage, seniors can be empowered to travel, hire in-home care, or have peace of mind. By attending a counseling session, seniors can be sure they understand the loan completely before proceeding. The loans themselves have few out-of-pocket costs and no payment requirements for the life of the loan.
While reverse mortgages may not be the right solution for everyone, they should be considered a potential option for seniors with equity in their homes who want to maintain their quality of life in retirement. If you or someone you know is interested in learning more, call 949-439-730 to learn how a reverse mortgage can help.
