Maybe you've seen the late night commercials. Maybe you've heard about them from a friend or family member. If so, you are probably curious as to what a reverse mortgage is and how it can help you fund retirement. Are you thinking about what retirement will be like? How will you save up enough money to maintain your lifestyle? If so, and you own a home with substantial equity, a reverse home loan might make sense for you. That said, there is no need to rush; look at this article for helpful tips and take plenty of time gathering information and making your decision.
Other Factors in Retirement
First thing's first - let's talk about retiring holistically. Don't forget to plan your life too, as you financially prepare for retirement. Most people learn early on that saving is very important, but they fail to take into account all the time they will have on their hands. Plan for hobbies, classes and volunteering, so you've got some productive things to do with your time! If your employer offers a retirement plan, invest in it. Many employers offer a matching plan which increases your savings, so make sure you invest at least up to the matching amount. In addition to saving for retirement, a 401k plan will help lower your income taxes every year.
Use one a retirement calculator to figure out how much money you need when you retire. You can find easy to use calculators online. After you input all the pertinent information, you will know how much you need to save in order to keep up your current standard of living. Do you want to maintain the same standard of living that you have right now when you retire? If so, you are going to need around 80 percent of your pre-retirement income. Start planning now. The best way to begin is to start researching what you need to do in order to retire. Go to your local library and check out a few books.
How a Reverse Mortgage Can Factor In
Many older Americans are homeowners. After all, this is a big part of the American dream. If you own your own home and have paid down or paid off a mortgage over the years, chances are you have built up substantial equity. A reverse mortgage is really just a way of borrowing against this equity. How much you can borrow depends on the value of your home, your age, and prevailing interest rates at the time.
Planning for your retirement is easy as long as you have the right info. Remember what you have learned, and you will be ready to succeed. You probably are looking forward to retirement, so keep this information in mind!
There's a lot of information to cover, so let's just give you a few external resources worth exploring for more information.
Reverse Mortgages - Frequently asked questions from HUD, the United States Department of Housing and Urban Development.
Reverse Mortgages Explained - A helpful primer that will give you the ins and outs of what a reverse mortgage is and how it works.
Reverse Mortgage Lender - Learn all about what to look for in a reverse mortgage lender.