You don’t usually find a realtor giving advice about taking an alternative to selling their home. But that’s just what we’re going to do here – because its important that you know all of the options available to you before you make up your mind on what to do with your home.
Sometimes those past retirement have hit financial trouble due to a lack of income and an insufficient pension with growing living expenses. Many people in this situation turn to selling their home, not because that’s what they want, but because it’s a way for them to use what equity they have to finance their living costs, and then move into a small, affordable apartment or rental unit.
Well, that’s not your only option if you find yourself in this situation. There is a mortgage product, called a Reverse Mortgage (or CHIP Mortgage), that allows you to take out a mortgage on your home based on the equity you have built up, and not make any payments until you decide to move. This allows you to meet your financial needs, and even enjoy your retirement with the money from the mortgage, all without having to worry about month to month mortgage payments.
The program is designed for those 55+, and can be tailored to suit your needs. Some people don’t like the idea of not even paying the interest on the mortgage for instance – well you can of course pay the interest each month and just have the outstanding principal remaining. You can also take the mortgage loan in one lump sum at the beginning, or in monthly installments.
The idea is that, you have built up equity in your home, but without an income, a traditional mortgage product doesn’t make sense. So with a Reverse, or CHIP, Mortgage, you can take out the mortgage you need to sufficiently meet the lifestyle you have planned for retirement.
To learn more about reverse mortgages, visit Reverse Mortgage Pros – where you can download a free reverse mortgage guide and learn everything there is to know about these products.
I encourage you to talk this over with your family, and discuss all of the options available to you before deciding what to do with your home.