Flexible Retirement Living
There’s no right way to retire. The options for retirement living are limited only by your budget and your priorities. Fortunately, your budget may not be holding you back as much as you thought.
Take a look at some of the ways you can settle in for the next phase of your life and a few of the unique options available to finance them. Unexplored flexibility to customize your retirement plans could have you heading in a new direction.
The majority of homeowners hope to age in place, often in their current home, after retirement. Not surprisingly, they prefer to remain there as long as possible rather than transition to the home of a loved one or a care facility at the first sign of needing assistance.
Modifying a home to support the goal of aging-in-place can be an excellent first step for retirees on this track. Mobility-friendly floor plans, showers with grab-bars, benches and low thresholds, slip-resistant flooring, and spaces that can accommodate live-in caregivers are all ways to increase the likelihood of remaining in a home.
Paying for some of these improvements can be expensive. However, it’s also one of the common ways that Home Equity Conversion Mortgage (HECM), or reverse mortgage, is used. These loans offer homeowners age 62 and up the ability to access their home’s equity. Notably, the repayment, along with any remaining mortgage payments, can be deferred for as long as the property remains the borrower’s primary residence.
Hitting the Road
Of course, maintaining the status quo isn’t everyone’s retirement goal. For more adventurous retirees, a reverse mortgage can still provide additional flexibility. The proceeds from the loan don’t have to be reinvested back into the home. Instead, they can be used to subsidize the purchase of a second home, as long as the original retains its primary status. Other borrowers will use the additional funding to purchase a camper or RV to travel the country. As travel restrictions due to the pandemic ease, crossing off bucket-list destinations can become a retirement reality thanks to the added income.
A special version of the reverse mortgage is also available for those interested in a more permanent change. A HECM for Purchase can combine the equity access of a reverse mortgage with a plan to downsize or relocate to a new home. Rolling over the proceeds from a home sale and establishing a HECM simultaneously with the new purchase can cost less than completing the transactions independently.
Retirees who are willing to make a move have the opportunity to find a home that already meets the aging-in-place requirements without spending additional money to make changes. Or, they can search for a property in communities exclusive to retired residents, making customized care options more convenient.
Regardless of your home’s role in retirement, start exploring your mortgage options with an experienced representative from Open Mortgage. Call today to speak with an origination specialist or browse our website for in-depth resources on all of our offerings.
- 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