• Question
  • Best time for Reverse Mortgage

    Asked by a 75 year old man from Bonita Springs, FL on 5/31/2012

    At what age is best for reverse mortgage or sell house? and reduce monthly costs.

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  • Categories: Housing, Tapping home equity

Answers

  • Editorial 


    NewRetirement

    San Francisco, CA

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  • Great question! Congratulations on being able to plan for using your home equity for retirement.

    The answer of when and how to use that equity will depend largely on your goals for retirement and lifetime interests. Here are a few things to consider:

    -- Downsizing your home can be one of the most efficient ways to tap your home equity.

    -- The sooner you reduce your costs, the bigger impact that will have on your retirement -- spending less now means that you will have more later.

    -- Many retirees stay in their existing home for sentimental reasons and they love their home. Other retirees are excited to relocate to an area or house that better suits their desired lifestyle.

    -- Be sure to consider taxes and maintenance costs when deciding to stay or relocate.

    -- If you are interested in staying in your existing home, then a Reverse Mortgage is certainly a good option. A Reverse Mortgage enables you to eliminate monthly mortgage payments and can also provide cash for retirement expenses.

    -------------> The theories behind how to time securing a Reverse Mortgage are currently in flux. Reverse Mortgages used to be thought of a product of last resort. However, more and more financial advisors are now incorporating Reverse Mortgages as a way to preserve wealth -- in certain cases it is better to use proceeds from a Reverse Mortgage instead of tapping retirement savings for example.

    This article describes some of ways people are using home equity to supply retirement income:
    http://www.fpanet.org/journal/ReversingtheConventionalWisdom/

    You might benefit from consulting with a Financial Advisor. NewRetirement can help match you to an advisor here:
    http://www.newretirement.com/financial-advisor-marketplace.aspx

    If you are interested in talking with a Reverse Mortgage lender, or estimating your Reverse Mortgage loan amount, proceed here:
    http://www.newretirement.com/Services/Reverse_Mortgage.aspx

  • Login to rate this answer:   Answered on 6/8/2012
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.