Reverse mortgages are one way eligible home owners can leverage their home equity to provide a crucial revenue stream in retirement.
And while reverse mortgages aren’t right for everyone, recent changes have made the financial product more appealing, writes Jamie Hopkins in a recent Forbes article.
“In April 2015, new rules have been implemented to help prevent previous miscues often associated with reverse mortgages,” he says, adding that a reverse mortgage can be properly utilized to “significantly improve retirement income security.”
Three different strategic uses of reverse mortgages within a retirement income plan include as a line of credit, to delay claiming Social Security benefits and to exchange debt for income by replacing a traditional mortgage payment with a reverse mortgage.
“Using a reverse mortgage is no longer just for the cash poor and house rich,” he says. “Instead, reverse mortgages can be used strategically as one part of a retirement income plan designed to build a buffer against sequence of returns risk early in retirement, help defer Social Security benefits or reduce cash outflow from traditional mortgage payments.”
Read the article here.
Written by Cassandra Dowell