How a Reverse Mortgage Can Allow You to Retire
January 24, 2025 | Posted by: Sherry Corbitt
Reverse mortgages have been a topic of conversation for some time now. Many debate whether a reverse mortgage can help some even to retire. With just a few points, you can be assured that a reverse mortgage can undoubtedly allow you to retire early.
What is a Reverse Mortgage?
A reverse mortgage is a loan that allows a borrower to have the unencumbered value of a property. The borrower can usually receive up to 55% of the home’s value. The money that they accept can be used for any purpose, such as paying taxes or insurance. It is made for people aged 55 and older to use. The significant part of a reverse mortgage is that the borrower only pays the loan when they sell the property.
Tax-Free Money
One of the most significant benefits of a reverse mortgage is that all the money a borrower receives is tax-free. You also have options as to when you would like to accept such payments. Some options can include receiving it once a month or as a lump sum. You also do not need to stick to one option necessarily; you have the choice to change it up, depending on your preference.
No Obligation to Move
This is a very convenient part of a reverse mortgage. Rather than having to search for a new home, you can continue to live in your house. This, of course, is mindful since reverse mortgages are meant for older ones. However, this can then surely make their process less stressful or worrisome.
Never Owing More than Your House Worth
As discussed previously, the borrower is only required to pay once they move or pass away. Yet, a key aspect to note is that the borrower will pay the value of the home instead of the mortgage. This can ultimately save the borrower quite a bit of money and ensure that they will not need to pay more than they need to.
From these points, a reverse mortgage can most certainly be a great option. However, if you qualify for a reverse mortgage, consider all aspects and what will work best for your situation.
If you have any questions or concerns about mortgages or reverse mortgages, please feel free to reach out to me!
Sherry Corbitt, Mortgage Broker
Sources
-Chip Mortgage (2021). How Does a Reverse Mortgage Work in Canada? Retrieved from https://www.chip.ca/how-reverse-mortgage-works/
-Keil Financial (2020). 5 Ways a Reverse Mortgage can Improve Your Retirement. Retrieved from
https://keilfp.com/blogpodcast/blog-5-ways-a-reverse-mortgage-can-improve-your-retirement
-Miller, Peter G. (2021). Reverse Mortgage Pros and Cons. Bankrate. Retrieved from
https://www.bankrate.com/mortgages/reverse-mortgage-pros-and-cons/
-Rainier Title (2020). Can a Reverse Mortgage Allow me to Retire Sooner? Retrieved from https://www.rainiertitle.com/can-a-reverse-mortgage-allow-me-to-retire-sooner/
