Don’t look now, but with home values on the rise so is home equity. That means that homeowners may have a little more available cash built up in their home. This is cash that can be used for a myriad of reasons; from paying off existing high credit card debts to helping their kids and grandchildren pay off some of that pesky student loan debt.
The problem is that accessing the equity, and the cash, means the homeowners need to take on new debt through a home equity loan or a new cash-out refinance. That could possibly lead to a higher monthly mortgage payment. There is an alternative.
Through a reverse mortgage, homeowners 62 and older can pay off their current mortgage and access their equity without incurring any new monthly debt. This money can be used to pay off other debts and/or provide their heirs with some of their inheritance…now. Why wait?
Reverse mortgages are on the comeback trail with more than 45,000 originated just this year. That brings the total number of these loans made since the inception of the program back in 1990 to over 1 million. That’s a whole lot of loans to help a whole lotta seniors!
These are seniors who have worked hard to build the equity in their homes. With the recent challenges from low employment, low income and a weak economy, many seniors had to tap their equity to stay afloat.
Now, with things improving and home values on the rise, they may have recovered some, if not all, of that equity. Equity they can use to improve their life.
Seniors now have a chance to do something to help themselves, reduce monthly expenses, and help their children. Aside from the obvious of paying off debts, seniors can tap their equity for such things as:
- Set up a fund for the payment of future taxes and insurance expenses and get some piece of mind
- Improve the home to be more “senior” friendly with upgrades that will make the home safer and more secure
- Complete repairs and other upgrades needed to maintain the home to increase value for when the time comes for resale;
- Buy a new home! Obtain 50% of the new purchase price through a Reverse Mortgage with the balance coming from the proceeds of the sale of their current home. The remaining proceeds may be invested or put aside for future home maintenance and operating expenses.
With help from a qualified lender, seniors can reverse the trend of working to build home equity, to having that equity work for them.
They can grab that money to help them live out their later years in the home they worked so hard to own. That place where they can be comfortable and secure, without the worry of having to meet a monthly mortgage obligation. A place they can truly call their home.
Are you offering Reverse Mortgages? If not, you may want to look into doing so. This can be one more way to increase business and improve your bottom line while helping seniors continue their dream of homeownership and maintain some level of independence.