Leveraging Your Home Equity in Retirement

Did you know that boomers currently have over 18 trillion dollars in housing wealth?
Did you know the average American’s retirement lasts 20 years?

Here are some additional statistics about retirement:

• 34% of retired individuals have no retirement savings
• 51% have no pension
• 64% of retired individuals use social security as over half their income

Yet, many of these people have a lot of home equity. They’ve owned their home for decades and have been paying down or have paid off their mortgage.

Home equity in retirement can be a valuable tool, yet many people don’t know how to leverage their equity.

Some common ways individuals use their home equity include:

• Renovations or repairs to their home
• Travel fund or legacy trips with family and children
• Paying off debt and other expenses
• Increasing their monthly cash flow for costs of living
• Passion projects
• Living legacy donations
• Or funding a grandchild’s college tuition

To utilize your equity, consider a reverse mortgage. A reverse mortgage works differently than a traditional mortgage as it is designed to give you access to your home equity, without increasing your monthly expenses (mortgage payment). The equity from a reverse mortgage can be taken in one lump sum, monthly payments to the borrower, or a combination of the two.

The best part is that you, the borrower, can live in your home for the remainder of your life without any additional mortgage payments. And you nor your heirs will never owe more than the house is worth.

A reverse mortgage is an FHA insured mortgage loan that is specifically designed to help seniors age in place by reducing monthly expenses. In many other countries, a reverse mortgage is referred to as a “Home Pension Plan.” Structured properly, the reverse mortgage addresses today’s cash flow needs and tomorrow’s medical care needs.