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11/30/2012

By Pat Gray
12/1/2012

I Don’t Need a Reverse ...
12/1/2012

Financing Your Future
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12/1/2012
Financing Your Future





By Pat Gray

While there are many ways to skin the proverbial cat, our current economic environment has left

many senior citizens and soon-to-be retirees in a quandary as to how best to finance their future.

For those with sufficient assets (savings accounts, 401K’s, IRA’s, pensions, etc.), the source of

an income stream may seem like a no-brainer, but many are reexamining their options.

Given the choice of withdrawing taxable funds from an asset account (and, perhaps, having to

withdraw more to cover the taxes) versus tapping into tax-free funds from the equity in a home

and allowing taxable assets to continue to grow, many seniors see the wisdom in the tax-free

option. A reverse mortgage affords homeowners that precise option.

While many reverse mortgages are needs-based, an increasing number are obtained as an integral

part of a smart financial plan. The reduced home values of this economy can actually serve to

preserve the borrower’s equity for the future, when, we expect, home values will rebound and

appreciation will once again become the norm.

A Reverse Mortgage is not one-size-fits-all. There are several different products to choose from,

each with their own specific costs, interest rates, and payout options. Homeowners age 62 or

older qualify to access a portion of the equity in their primary residence in a tax-free loan,

without incurring a monthly debt payment as long as they remain living in the home. There are

no income or credit score requirements. Seniors wanting to purchase their retirement home may

also do so with a reverse mortgage, another way to preserve cash while financing a property

without monthly debt payments.