For many seniors who are approaching retirement age their home equity is their largest and most valuable asset. According to the U.S. Census Bureau‘s 2013 wealth and asset report (published in 2017), home equity makes up three quarters of an average households net worth.
Homeowners can tap into their home equity in several ways. They can take out a home equity loan (also known as a second mortgage), obtain and borrow against a home equity line of credit (HELOC), refinance their home with a larger mortgage and take the cash (known as a cash-out refinance), or get a reverse mortgage. They can also sell their home, purchase a less expensive home or rent, and pocket the net proceeds.
There are many options to accessing the equity in your home during retirement. So why do some retiree’s take the reverse mortgage path?
A reverse mortgage is typically utilized by seniors needing to increase their cash flow during their retirement years. Here are a few ways that equity is used.
THREE WAYS TO USE THAT CASH
LEVERAGE YOUR EQUITY: Improve monthly cash flow by accessing the equity you have built over the years.
PAY OFF YOUR MORTGAGE: A reverse mortgage can help you eliminate your existing monthly mortgage payments.
REMAIN IN YOUR CURRENT HOME: Retire in your current home you love, close to friends and family.
To explore more about how to access your equity through reverse mortgage, download the Ultimate Guide to Reverse Mortgage or contact a qualified mortgage advisor today for a personalized quote.