If you’ve lived in your home for more than a few years, you’ve likely built a life that includes many fond memories, neighborhood friends and a comfortable familiarity that makes this the place where you want to spend your retirement. You’ve likely built equity in your home at the same time.
So what happens if your retirement income isn’t enough to sustain your home and the lifestyle you’re hoping for? Or perhaps you prefer to age in place, but will need home care. This is where a reverse home mortgage can offer the perfect solution.
Today’s reverse home loans come in a variety of flexible options and address some of the misunderstandings of previous versions. For example, you remain the owner of your home, emphasizes Ruth Gillis, a mortgage broker with OneTrust Home Loans here in Everett, who’s been working with reverse home loans since 2007.
“In fact, you have a lot more control – one of the reasons we’re working more with financial planners and elder law attorneys,” Gillis says, noting the strict guidelines that govern mortgages of all kinds, including reverse mortgages.
Essentially, a reverse mortgage “opens up the equity in your home for you to use, without creating a strain on your budget. It’s for planning a better retirement,” Gillis says, recalling one couple who used the option to ensure the wife could stay in the home in the event of her husband’s death.
“He’d had a heart attack and she desperately wanted to stay in the home. Now she’s paid off her original mortgage and she’s still in her little home in Everett. I love that story,” Gillis says.
Another woman wanted to enjoy a better lifestyle in retirement than her savings and pension would allow, and leveraging the equity in her home allowed her to do that.
“There are many reasons why a reverse home mortgage can be a good option for someone. It’s another tool in your financial planning toolbox.”
How does a reverse home mortgage work?
While every person is different, Gillis shares some general guidelines about a reverse home mortgage with OneTrust Home Loans, a Direct Mortgage Lender:
- A person can become eligible for a reverse home mortgage at age 62, but the amount you can receive will vary according to your age, home value and amount of equity in your home.
- Payments on the reverse mortgage are optional, but the property must be owner-occupied, and you must pay your property taxes and home insurance.
- The loan becomes due within six months after the death of the individual, or the surviving spouse, in the case of a couple. Beneficiaries have the option of paying off the loan and retaining the home, but typically the home is sold and any remaining equity after the loan is paid off would be dispersed according to the estate. Two 90-day extensions are available if the estate remains in probate or the house hasn’t sold.
To learn more about the possibilities for your retirement, contact Ruth Gillis, NMLS #422726, at firstname.lastname@example.org or call