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The Intangible Benefits of a Reverse Mortgage

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Larry spent his working career in the film industry.  Once he retired, he wanted a way to supplement his income.  Like many over the age of 62, he decided that a reverse mortgage offered him a lot of benefits.

A reverse mortgage is a powerful tool that seniors can use to supplement their retirement income.  This special type of loan allows borrowers over 62 years of age to borrow against the equity in their home to receive payments from the bank, instead of making payments to the bank.  The borrower can choose how to receive these payments from a list of options like: lump sum, fixed payments over time, a line of credit, or a combination of these.  

Reverse mortgages can help financially during retirement in a variety of ways.  One way is with existing expenses.  Some immediate needs might be large medical bills or home renovation costs.  These can be difficult to afford with Social Security benefits or a pension.  

Another way that reverse mortgages have become a powerful financial tool during retirement is by using them to delay drawing on Social Security benefits.  The money from a reverse mortgage can be used to meet the needs of retirement and be the difference between drawing on Social Security benefits at age 70 instead of age 62.  

However, Larry let me know that there are a lot of other benefits to a reverse mortgage besides the financial side.  For him, a reverse mortgage offered him the option to stay in his current house.  He can continue to live near the same friends and neighbors, see the same doctor, go to the same barber, and visit his favorite restaurants that he’s grown to love and trust over the years.  These intangible benefits are something that is very important to him, and it’s something that those considering a reverse mortgage should think about if another option is downsizing (and moving).  While this isn’t the main reason anyone should take out a loan, the fact that a reverse mortgage allows the homeowner to stay in their current house can be very comforting and reassuring.  

If you are reading this blog post and considering a reverse mortgage, I’d encourage you to think about what it would mean to leave your current house and move to a new one.  For some, this can be an exciting change.  For others, it would mean leaving a place they know and love.  

If you’re interested in learning more about a reverse mortgage, please give the folks at Equity Access Group a call.  This is the team that helped Larry with his reverse mortgage, and he wanted me to communicate that he highly recommends them.  

 

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