Dealing with a reverse mortgage in retirement

Being able to comfortably live during retirement years is one of the major concerns that affects every retiree to be. For those retirees who haven’t managed to prepare for a truly comfortable retirement, reverse mortgage can become the best solution they have. After many years of paying down your home mortgage , you are likely to build up a quite sizable amount of equity. The more equity a retiree has, the higher his/her standard of living can be. With the reverse mortgage, your lender will start paying you on a monthly basis for the exact amount you have already chosen.

In essence, your house will be bought from you, but you will not have to move out. The lender will pay off the current balance of the mortgage out of the current value of your house. You will be paid from your house equity. You can choose to receive this money as monthly payment that may come along with a credit line, a lump sum or you can choose to be paid both ways. Since you have a reverse mortgage, you will not need to pay anything. Actually, any fees for closing will be put right on the end of your mortgage. The houseowner’s main obligation to repay the current loan will be deferred until the home is sold, the owner dies or he leaves into the aged care. This will allow you to get the reverse mortgage regardless of your income.

There are just two main requirements: to have an equity in your house and be at least 63 years old. By selecting the monthly payment for your reverse mortgage, you can supplement your retirement income and provide yourself with a comfortable standard of living. The medical expenses can be provided as well – for instance, the balance of the equity can go straight to the nursing home expenses, in case you decide to leave into the aged care. The terms of a reverse mortgage will allow you to live in your house as long you feel like it. You don’t have to move out but, once you move into the nursing home or die, your house will be sold.

But keep in mind that reverse mortgage scams are very likely to be on the rise because they have become so popular among seniors. Such a scam would have a disastrous effect on your retirement income because your home is likely to be your biggest asset. The biggest way to try and fight against such scams is to provide yourself with useful information and keep yourself educated about the main features of a reverse mortgage.  Here are some tips for you to use in order to stay away from such reverse mortgage scams.

First, you should know that you don’t have to pay for the necessary information concerning a reverse mortgage. The reliable companies that deal with such mortgages will not charge you for simple information, unless they have this piece of information added on the estate planning program. Other things you should know in order to avoid the scams – you must not use the reverse mortgage in order to pay for other services or products and you must be aware of the fees that are too high. Just make sure that you understand every reverse mortgage contract you make because you cannot afford to make mistakes that might cost you your retirement.  


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