If you're retired and looking for ways to increase your financial security, a home equity conversion mortgage-- or more commonly referred to as a "reverse mortgage"--may be something you've been considering. Used correctly, this is one of the most effective financial products for retirees who own their home.
Let's explore three ways that a reverse mortgage can help unlock a bit of income to your monthly budget.
All About Flexibility
The primary benefit that one receives with a reverse mortgage is financial flexibility. It's an excellent way to tap into the equity that has built up in your home over time without having to sell your house. Unlike a traditional home loan, the payment terms are far more flexible. In many cases, payments are not required until you are ready to leave the home permanently.
An Extra Source Of Income
Is the increasingly high cost of living in Orange County starting to pull on your monthly budget? Regardless of how much you have saved in 401k and other retirement accounts, losing that regular monthly income can be depressing.
The good news: a reverse mortgage can help to change that. The funds you receive can be used however you want. You can invest in reno
vations for your home, take a nice vacation, invest in the stock market or simply leave it in your bank account. It is a helpful 'bridge' income source that will ensure that you have no trouble taking care of life's many expenses.
A Contingency Fund, Just 'In Case'
Finally, a reverse mortgage or home equity conversion mortgage can be an excellent contingency fund. If you take this out as a line of credit, the money will be available if and when they are needed. Many retired individuals lack a financial 'safety net' and end up suffering due to unexpected health or other costs. With a reverse mortgage, you can sleep soundly knowing that emergency cash is there if needed.
As you can see, taking advantage of a reverse mortgage can be the catalyst that helps take your retirement to the next level. Check out the HUD Government website to learn more about reverse mortgages.