Americans are living longer. And, home prices in the U.S. are up more than 36% since October of 2011, according to October 2015 data from the National Association of Realtors.
For many senior citizens, their home is their biggest asset, often accounting for more than 50% of their total net worth.
With so many people now worried about outliving their savings, it’s no wonder why more seniors are using HECM reverse mortgages to turn their home equity into extra cash for retirement.
However, there are still millions of homeowners who could benefit from this FHA-insured loan but may simply not be aware of this “retirement secret.”
Some people think reverse mortgage loans sound “too good to be true.” You get cash out of your home, no monthly mortgage payments, and you still own your home.
It’s true, no monthly mortgage payments are required with a reverse mortgage;* the homeowners are responsible for paying for maintenance, property taxes, homeowner’s insurance and, if required, their HOA fees.
Reverse mortgages first took hold when president Ronald Reagan signed the FHA mortgage bill into law over 29 years ago to help senior citizens remain in their homes.
They’re simply an effective way for folks 62 and older to get the cash they need to enjoy their retirement.
Although today’s HECM reverse mortgages have been greatly improved to provide greater protection for homeowners, there are still a lot of misconceptions. For example, many people mistakenly believe the home must be paid off in full in order to qualify for a reverse mortgage loan, which is not the case. One key advantage of a reverse mortgage is that it automatically pays off your existing mortgage, which frees up cash flow, a huge blessing for those on a fixed income.
Unfortunately, many homeowners who could benefit from a reverse mortgage don’t even bother to get more information due to rumors they’ve heard.
That’s a shame because reverse mortgages are helping many seniors live a better life.
A survey by American Advisors Group (AAG), the nation’s number one reverse mortgage lender, found that over 95% of their clients were satisfied with their reverse mortgages.
If you’re a homeowner age 62 or older, you owe it to yourself to learn more. Today, there are many strategies for using housing wealth for retirement.
You may be pleasantly surprised by what you discover when you realize all of the financial options now available for retirees. This valuable information is free so you might as well check it out.