By Alain Valles
There is great joy helping seniors implement a long term home ownership and retirement plan. It is gratifying to see a senior achieve the goal of remaining independent, having enough cash to enjoy life and having emergency funds available for unexpected challenges. There are many financial products to assist achieving these goals, including pensions, annuities, Social Security, savings and investments. Lately, more and more financial planners are discussing the merits of obtaining a reverse mortgage.
Reverse mortgages are a federally insured loan program that allows qualifying seniors 62 years or older to access the equity in their homes in the form of cash, a monthly check or a line of credit that is available for as long as one lives in the home. Here are just a few examples of how reverse mortgages have been able to help people.
Paying off the mortgage and credit cards: Mortgages and other loan payments can be quite stressful. This is especially true for high interest rate credit cards, some with over 25 percent interest. By paying off consumer debt, auto loans, mortgages and other installment loans with a reverse mortgage, you can significantly reduce financial stress and increase available cash flow.
Rainy day/emergency funds: “Life is what happens to you when you’re busy making plans.” Even with the best financial advice there will be times when more money is needed. Perhaps there is a health issue, a leaky roof, a car repair, or an adult child that called needing a few dollars and you would rather not liquidate your investments. With proper planning, a reverse mortgage can provide the additional cash needed without impacting your financial stability.
Home renovation: There is a growing trend of seniors who don’t want to move or downsize, but instead make home improvements. Such investments help maintain and often increase the value of a home. Replacing your roof or upgrading to a more efficient heating system are examples of smart investments that can be funded with a reverse mortgage.
Active retirement — “75 is the new 55” With improved living habits and advances in medical care many seniors are enjoying a much more active lifestyle. Travel and entertainment costs money and a reverse mortgage is one option for funds. For others a “working retirement” is the goal. Being able to work when desired while knowing a reverse mortgage can provide any needed cash flow is comforting.
Alain Valles, CRMP and President of Direct Finance Corp., was the first designated Certified Reverse Mortgage Professional in New England. He can be reached at 781-724-6221 or by email at firstname.lastname@example.org or visit lifestyleimprovementloan.com. Read additional articles archived on www.fiftyplusadvocate.com