Why Would a Senior Want to Go Deeper in Debt in Retirement?
Many think of home equity as a form of savings, much like an IRA or 401k plan. So, while a reverse mortgage is a form of debt, it can be used as a tool to access home equity savings that can be responsibly spent down to improve the quality of one’s retirement lifestyle. Key advantages include: • You remain independent. A reverse mortgage allows you to remain in your home and retain home ownership. • No monthly mortgage payments. You need not pay back the reverse mortgage loan nor make any monthly mortgage payments until you permanently move out of the home. • Tax-free money. Because the money you receive from a reverse mortgage is not considered income, it is tax free and will not affect your Social Security or Medicare benefits.How Is a Reverse Mortgage Different from a Home Equity Loan? It’s true, both a reverse mortgage and a home equity loan use the equity you have built up in your home to provide you with readily available cash. They differ in that with a home equity loan you must
