There’s a show I record every night on HGTV called BuyMe. It’s a one of those reality home selling shows, set in Canada, and I enjoy watching real people attempt to sell their homes. The episode I watched today was a little sad. A retired couple realized that they were really missing their grandkids, and they decided to sell their home and move 3,000 miles away to where their children had settled. Because of the difference in home values, they ended up selling their old home (which they had purchased for just over $100,000) and making $300,000 in profit. The trouble was that their NEW house cost over $430,000 – and needed renovations, so they really didn’t come out ahead. It got me thinking about retirement and your home, which is typically your biggest investment.
When my grandfather bought his retirement home, he paid cash – about $50,000. The market increased dramatically, and after he passed away in 2005, it was sold for about 3 times as much as he had paid for it. The money was split between my mom and her siblings, but it’s money that most seniors could use while they’re still living. There’s a lot of stories in the news about seniors not being able to afford proper health care, or medication, and I hate hearing about those things – it should be the best time of your life. Spoiling grandkids, and enjoying the fruits of your labor after years of work. Most senior homeowners probably aren’t away that there’s a mortgage that can help them use the equity they’ve built up in their homes over the years, to improve their quality of life NOW.
To take a reverse mortgage, you just need to be over the age of 62. You can convert the equity of your home into cash or monthly payments that they lender pays to YOU. This reverse mortgage calculator can help you see how much you’d stand to gain each month. There’s also a detailed overview of the reverse mortgage process. The short version though, is that you get payments each month, and your equity decreases a bit with each month that goes by. Obviously, your total equity is reduced, so your heirs won’t get as much from selling your house as they could, but it this can make a difference in your quality of life now, and reduce your worry about finances, then it’s worth it.
