If you’re over 65, you’re probably thinking about retirement. Maybe you’re getting a little stressed about it. How are you going to afford everything you need when your income and savings are limited? Your home is probably your greatest asset. You’ve put more money into it than anything else you own. Wouldn’t it be great if you could get some of it back?
What is a reverse mortgage?
A reverse mortgage lets you tap into the money you’ve put into your home (your home equity) to get cash. You’ve been building up your equity on your home for years, and now you can have some of that equity paid back to you. You don’t even need to pay the money back until you no longer live in the home. A reverse mortgage can be great if you need supplemental income to pay for insurance, renovations, debt payments, or the expenses of day to day living. The more your home is worth, the older you are, and the lower your interest rate, the more money you can access.
What are my options for a reverse mortgage?
There are five different types of reverse mortgages, and your unique needs will determine which is right for you.
- Tenure – With a tenure reverse mortgage, you will be paid the same monthly payment as long as one of the borrowers (you or your spouse, for instance) still lives at the property.
- Term – A term reverse mortgage is limited to a certain time period. You’ll still get a monthly payment, but it will end after the number of months that you and the lender agree on.
- Line of Credit – A line of credit reverse mortgage allows you to get flexible, unscheduled payments until the line of credit is exhausted. You choose when and how much you want each payment to be.
- Modified Tenure – Modified tenure reverse mortgages combine the tenure and line of credit types so you get flexible payments and monthly payments until your equity is exhausted.
- Modified Term – Modified term reverse mortgages combine the line of credit and term types, giving you flexible payments and monthly payments for a fixed amount of time you choose.