If you are a senior homeowner who lives alone, you may likely face some ongoing challenges relating to your independent situation. A house can be a lot to manage, and finances can become overwhelming if you’re not accustomed to managing them. It can be difficult to recover an unexpected expense such as a health care event or a needed home improvement when you are on your own.
Older Americans who live alone tend to be more stressed financially than those who live with a spouse or family member, according to research by the Pew Research Center*, with only about one in three people over 65 who live alone reporting they feel financially comfortable.
Would you like to learn about an option that might help ease your independent living situation? If you are 62 or older, own your home outright or have a substantial amount of home equity, you may be able to tap into that home equity using a HECM (Home Equity Conversion Mortgage).
How it Works
An FHA-insured HECM reverse mortgage allows the borrower to access his or her home equity while still living in the home as a primary residence. It’s a loan like any other than needs to be repaid, but as long as the borrower adheres to the terms of the loan, it is not due until the borrower passes away or moves from the home.** Borrowers can choose to receive funds as a lump sum, a line of credit, or as monthly payments. You can also use a combination of these options.
How it Can Help
Tapping into your home equity can lift a major burden while still allowing you to live in the home. Reverse mortgage proceeds can be used however the borrower chooses, which provides flexibility for many older homeowners who live on their own.
Here are a few ways a reverse mortgage can help eligible homeowners:
Eliminate monthly mortgage** payment: If you have an existing mortgage – with substantial equity – the reverse mortgage can be used to pay off the home and eliminate the monthly mortgage payment.
Free up funds for monthly expenses: Reverse mortgage proceeds can be used toward ongoing household payments such as lawn mowing or snow removal.
Lessen the burden on adult children: By tapping into home equity, you may be able to reduce the burden on your children, both in terms of their time and monetary contributions.
Make visiting family within reach: Loan proceeds can be used toward travel expenses, making it possible to enjoy a trip to see family or friends.
…and more: A reverse mortgage can be used in many ways to reduce financial stress.
There are many options that a reverse mortgage can provide to older homeowners which help ease day-to-day expenses and provide peace of mind for future events.
Learn more about how a reverse mortgage can positively impact your life by contacting a specialist from Finance of America Reverse.
This article is intended for general informational and educational purposes only, and should not be construed as financial or tax advice. For more information about whether a reverse mortgage may be right for you, you should consult an independent financial advisor. For tax advice, please consult a tax professional.