Five Unexpected ways a HECM Could Improve Your Quality of Life
Retirement is one of the milestones most looked forward to in life. Work is done and free time reigns. Maybe you’ve always wanted to travel Europe, or take up sailing, or just live closer to your children and grandchildren, but money is tighter now. For many, a Home Equity Conversion Mortgage (HECM) is a great way to increase your cash and accomplish your bucket list in your retirement years. Here are five unexpected ways to use your HECM.
The retirement age keeps getting pushed back, making it harder for many to maintain their lifestyle without a full-time income. You could utilize a HECM to bridge the gap between when you want to retire and when your full retirement benefits kick in at age 65 or 66.
Buy a Boat, Sports Car or Travel
Your retirement plans are secure. Maybe it is time to do some of those things you have always wanted to do. Why not? A HECM could help fund that little red convertible you’ve always been too sensible to buy. If you’ve spent years dreaming of sailing, there is no better time to take it up. Buy a small boat and take some lessons. Always wanted to travel Europe? Nothing is stopping you now.
Replace Your Mortgage and the Mortgage Payments with a Mortgage Without Monthly Payments
Which mortgage works best in retirement? Of course, you still need to pay your other housing expenses, taxes, insurance etc. But using the equity built up in your home will free up a large chunk of your regular monthly income for other expenses. Going into retirement without a large mortgage payment eating at your new limited income will help you afford to be able to buy and do more of what you want with your money. Conversely, maybe you want to be closer to your family and purchase a smaller home. With a reverse mortgage, you can do just that and have some extra spending money for your golden years with your loved ones.
Hire Out the Work
Maybe you’ve maintained your lawn or house or pool your whole life to save on the expense of hiring someone else to do it. Now you can take back your time and hire a service to manage the day-to-day upkeep. Sit back, relax and let someone else do all the work for a change.
Remodel Your House
Many retirees want to stay in their home as long as possible, but accessibility needs can change over time. A HECM could help pay for a remodel, such as making doorways wheelchair accessible or putting in a soaking tub for arthritis. It could also pay for small-ticket items, like handle grips in the bathrooms or ramps instead of steps, or more expensive upgrades, like installing a lift in a two story house.
A reverse mortgage professional at Open Mortgage can review your financial situation and provide you with options to help you decide if a HECM makes sense for you. Contact Open Mortgage today to speak with a specialist.
Things to know about Reverse Mortgages:
- At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds
- Charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees
- The loan balance grows over time and interest is charged on the outstanding balance
- The borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home
- Interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment