There are so many different uses for a reverse mortgage that often go overlooked that it can be helpful to learn about all of your options with these HECM home loans. If you are not up-to-date on what benefits a reverse mortgage has to offer, we’ve got you covered in this related post about their benefits. Provided you are of the qualifying age of 62 and have adequate equity in your home, here are five uses you can consider for reverse mortgages.
Line Of Credit For When You Need It
You don’t have to take a reverse mortgage payout as a lump sum or a monthly payment, which are both options. Rather, you can just accept a line of credit. This line actually increases with each year, and you will only pay interest on the amount that you borrow, as you borrow it. It comes in handy for unforeseen expenses, vacations or just money when you need it.
Delay Social Security Benefits
The short answer here is: yes, you can delay your Social Security benefits with a reverse mortgage. Now you will want to carefully consider your options here. But the longer that you wait to accept Social Security benefits, the more they will increase with each passing year. In essence, you can get the biggest payout by deferring them by using a reverse mortgage.
Eliminate Monthly Mortgage Payment
A reverse mortgage pays off your existing home loan balance and creates a new instrument. This eliminates your monthly payment because you do not pay a reverse mortgage back until after your death. Imagine no more monthly housing payments and what that could do for your budget.
Consolidate High Interest Debt
Did you know that average person over the age of 62 has over $50,000 in debt? Just imagine what the interest fees are on this debt each year. This represents an 83% increase since 2001. But with a reverse mortgage, you can pay down this debt and eliminate the interest and fees in one swoop.
Financial Safety Net
Finally, having a financial safety net as you get older is a wise decision. Medical bills alone can tap you out of all of your savings. Knowing that you have a secured retirement and a financially sound future to look forwards to is something we can all get on board with.