Reverse Mortgages

Many seniors do not have many funds available to them simply because they do not generate enough income from their social security, pension, and other long term investment plans.  While it may have been beneficial to start financial planning for retirement at a younger age, the past cannot be changed.  By utilizing the services of a New Jersey financial planner, a Philadelphia wealth management firm, or an NJ private wealth management firm, seniors likely will realize that an option that could be most beneficial for them is a reverse mortgage.

“ For many seniors the equity in their home is their largest single asset, yet it is unavailable to use unless they use a conventional home-equity loan. But a conventional loan really doesn’t free up the equity because the money has to be paid back with interest.

A reverse mortgage is a risk-free way of tapping into home equity without creating monthly payments and without requiring the money to be paid back during a person’s lifetime. Instead of making payments the cash flow is reversed and the senior receives payments from the bank. Thus the title “reverse mortgage”.

Many seniors are finding they can use a reverse mortgage to pay off an existing conventional mortgage, to create money for a down payment for a second home or to pay off debt. Popularity is skyrocketing. Over the last five years the number of reverse mortgages nationwide has tripled. The uses of this untapped wealth are only limited by a person’s imagination.

For those seniors who earn low incomes but own a home, a reverse mortgage can allow them to remain in the home by creating extra income. It can also allow for remodeling or repairs and when the time comes to sell, the investment in the home can make it more valuable.”

These mortgages do not require having to find a financial advisor, but it is recommended.  This is a major financial decision that needs to be made, and the usefulness of a financial planning guide may fall short of being the only tool used to make this choice.

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Posted by Jay McGrath | Leave a comment