Reverse Mortgages : Saving Retirement?

Reverse Mortgage Retirement Couple.

Reverse Mortgage Retirement Couple.

Are Reverse Mortgages Saving Retirement for seniors?  I want to share an all too common situation that I’ve stumbled upon in the regular course of business as a loan originator that specializes in reverse mortgages. I feel like I have to warn future generations of this common financial mistake that I see retirees committing usually around 5-10 years before retirement age.  For the purpose of this story, keep in mind that retirement age is typically between 62 and 67, so at age 52 through 57 a property owner is a mere 10 years away from retirement age and may not realize how close they are to retirement.  Also keep in mind that you must be at least 62 years old to qualify for reverse mortgages.

Here is a recurring situation that I have stumbled upon:

I come across many homeowners that did a huge cash out refinance transaction 5-10 years before their retirement age. Fast forward to the time they want to retire a short decade later and they simply cannot. The burden of the monthly obligation of that cash out refinance, that seemed like a good idea at the time, is just to much for them to handle if they switch from earning an income to a lower fixed retirement income. Many retirees feel stuck and unable to retire!  That is where reverse mortgages come into play.

I have had the pleasure of helping many seniors by refinancing them into reverse mortgages and eliminating their monthly mortgage obligation, allowing these homeowners to retire with peace of mind.   By replacing their existing mortgage, which has a monthly payment, with reverse mortgages with no monthly payment (please note that the property owner continues to pay taxes and insurance) the property owners experiences instant financial relief.

At age 55 a homeowner may feel like they will continue to work forever, but ten years later at 65 that former reality may be a distant thought.  The morrow of the story is that cash out refinances, when property owners are close to retirement age, are high risk propositions that should be really thought through.  However, Reverse Mortgages are a simple smart solutions for borrowers  & homeowners that are looking for a way out of an existing loans with high monthly obligations.

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