Reverse Mortgages Boosts Financial Security in Your Retirement Years

Retirement years mean one thing: you’ve got to financially downsize and make do with a budget that comes from your social security and pension. If you’re short on cash and need a way to boost your monthly income, or have an emergency you need to shell out money for, it can be difficult to come up with the funds you need.

But if you’ve got enough home equity, reverse mortgage companies might provide you with a solution through a Home Equity Conversion Mortgage, or HECM.

How does It Work?

A traditional home mortgage means you send monthly payments to a lender as you build up the equity in your home. For reverse mortgages, the opposite happens. The lender sends payments to you, buying a portion of your home equity. You remain the property owner and the title deed stays with you. Think of it as security for the loan. When you sell your home, don’t live there anymore or die, that’s when the loan gets to be repaid. So, as your debt increases with every monthly payment you receive, your home equity decreases in value.


The arrangement offers you many benefits, including:

*   Disbursement. You can decide if you want a lump-sum payment, a monthly cash advance, a line of credit, or any combination of these payment methods.
*   Payment. You don’t pay a single cent for as long as you live in your home.
*   You don’t need to have a minimum income. You’re not going to make monthly payments, so this isn’t a requirement.
*   Cash advances are non-taxable, which means you get all the money. They also don’t affect your social security or Medicare benefits.


Considering the benefits, HECMs work for a lot of financially-strapped seniors. To make the most out of your home’s equity, be sure to pick an excellent reverse mortgage expert to guide you through the entire process.

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