Tapping Into Your Home Equity

Reverse Mortgages: Tapping into Your Home Equity without Mandatory Monthly Payments

Reverse mortgages differ from conventional home equity loans in one major way: you can get the benefits without the requirement of making minimum payments each month.

There is also added flexibility in the way that reverse mortgages help you to extract value from your home equity. For example, in most types of reverse mortgages, you can decide whether you want lump sum payments or a monthly income stream.

Further, unlike a conventional home equity loan, with a reverse mortgage, your liability is capped at the value of the home. The loan only becomes due and payable if the homeowner dies, fails to remain current with property maintenance, taxes, and homeowner’s insurance, or moves to a different property.

Using a Reverse Mortgage as a Strategic Retirement Tool

Compared to a home equity loan, a reverse mortgage is an excellent strategic retirement tool for homeowners who are “house rich” and “cash poor”. It is a directly superior option to a home equity loan for homeowners who are 62 years of age or older because the payment schedule can be structured in a way that best matches your current financial situation.

So, for example, if you have short term debts due on a regular basis, a lump sum payment from a reverse mortgage that uses your home equity as security can enable you to repay that debt on an accelerated schedule. If you are overburdened by high-interest debt, you can liberate yourself from that obligation using the value from your home equity through a reverse mortgage quickly and easily.

Further, reverse mortgages can be used to finance home purchases to make it easy for you to “downsize” or “right size” to a more appropriate property for your retirement. You can move closer to family, trade a multi-floor home for a single-floor home, or use the difference between the sale and home price to get an infusion of tax-advantaged cash.

Learn More About Tapping into Home Equity with a Reverse Mortgage Loan

For more about strategically using your home equity with the help of a reverse mortgage, contact a representative from Citizens Lending Group at (800) 480-6828. You can also use our online reverse mortgage calculator to find out how much you can qualify for.