Start the New Year in Reverse
Fiscal responsibility is the resolution that many of us make, but most fail to keep. As 2020 comes to a close, homeowners over the age of 62 can explore a flexible financial strategy to keep their New Year’s goals within reach — a Home Equity Conversion Mortgage (HECM).
For many seniors, a HECM, or reverse mortgage, can offer the best path to stability while increasing their retirement lifestyle options. And if you’re eligible, this can be a great time of year to determine if a reverse mortgage is right for you.
A Solid Start
Traditionally, the start of a new year pushes most of us to reconsider, or recommit to, our goals. Whether it’s getting in shape, learning a new skill, or saving more money, attainment usually requires making some changes, often dramatic ones.
While you’re taking the time to establish your priorities for the upcoming year, don’t overlook one of the most substantial tools available. The deferred repayment of a reverse mortgage can put your hard-earned home equity to work while you continue to enjoy the home you love. That kind of financial flexibility could support your ability to successfully stick to a new plan, regardless of what it is.
Fund Your Resolutions
Regular monthly payments from a home’s equity are among the most common ways that seniors boost their budget with a reverse mortgage, but it’s not the only option. It might be the route to other resolutions.
A lump-sum withdrawal can finance home upgrades or efforts to make aging-in-place more realistic. It could also provide the security to pursue lifelong dreams of travel or additional education. A HECM for Purchase can minimize the costs of relocation. Meanwhile, the ability to open a line of credit via a reverse mortgage can provide a reserve source of funds to safeguard investments or avoid a financial dilemma.
Time to Prepare
Beyond the personal reflections that take place this time of year, the tax documents and end-of-year statements that begin rolling in make it simpler to review your circumstances. Be prepared for your upcoming conversations with any accountants and financial advisors by understanding your HECM options now.
And although 2020 has been challenging, the likelihood of a shift toward normalcy by the summer of 2021 seems high. Taking the time to do the hard work of planning now, while your activities are limited, can ensure you’re ready to take advantage once the confidence in our ability to stay healthy returns.
Browse our website for more information about the many ways that a HECM can impact your future, or call today to speak with an expert ready to answer your questions.
- 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