Your House Can Pay You to Retire
The Motley Fool, May 19th, 2008
Getting income for life and staying in your home as
long as you want sounds like the perfect combination. If you're
cash-strapped and having trouble making ends meet, a product that
promised a deal like that would look like a life-saver.
For homeowners over 62, reverse mortgages offer exactly that promise. To seniors who struggle with ever-increasing costs of living and falling CD income, it sounds like the perfect solution -- they can supplement their cash flow without having to sell their home and move.
But before you or your loved ones decide on a reverse mortgage, make
sure you understand its limitations and shortfalls as well as its
promises.
What a reverse mortgage does
Reverse
mortgages allow you to tap into your home's equity without having to
sell it. Unlike regular mortgages, you don't have to make any monthly
payments to your lender, and the lender can't collect the principal
until you sell your home, pass away, or move to another primary
residence, such as a nursing home.
Depending on your age and the value of your home, a lender will offer
you a variety of payment options. One option is to take a lump sum. You
can also establish a line of credit you can draw on at will, or get
fixed monthly payments as long as you stay in your home.
Read more of this articleAbout Reverse Mortgages: Learn all about reverse mortgages at NewRetirement.com
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