It’s no surprise that the majority of Americans aren’t good at saving for retirement. Many Baby Boomers are waking up to the realization that they are going to have to work much longer in order to afford retirement or possibly not even retire at all. If you are in this predicament, do you have any options other than not retiring? The answer is yes: you can consider taking out a reverse mortgage. In fact, reverse mortgages should play a role in the retirement of many Americans.
What Are Reverse Mortgages?
A reverse mortgage is when you get a monthly income stream from the lender based on a percentage of the value of your house. Typically, the more valuable your home is worth and the older you are, the greater the monthly income you can receive from taking out a reverse mortgage.
Here is how it might work: you take out a reverse mortgage on your house and the bank pays you a monthly income of $800. You do not have to repay the loan as long as you are living in the home and you have not sold it. Sounds good, right? There are some things you need to know before taking out a reverse mortgage: