Prices in Kansas City keep going up. Investment accounts keep dropping. When will it stop?
For most seniors/retirees the options to overcome this financial problem are limited.
• Turn to family: Families are struggling financially. So is that a viable option?
• Get a job to make ends meet. Is that the way live their retirement years?
• Look to an asset that has been off limits. The house.
Traditionally, the focus was to leave it to the kids. A noble sentiment, but in today's world where pensions are dwindling, social security benefits are not what many expected and so many put off savings to pay off their home we may need to change our thoughts on how our house is treated in retirement, especially when prices are skyrocketing.
Let's review the options with the house.
• You could sell and move into a smaller home, rental or with family and live off the money.
• The costs to sell are significant, you need to see how much you would be able to keep if you buy something smaller.
• If you rent, how long could you live, pay rent and tap that money as costs go up is the key question to that strategy.
• Moving in with family- many look at this as a last resort.
Another potential option that many have stayed away from, mainly due to a lot of misinformation, is the possibility of a Reverse Mortgage.
• A reverse mortgage could give you a lump sum of money, income for life, income for a certain period of time, a line of credit (that can grow every year) to draw money when needed or a combination of all of these options.
• They are for people 62 and older,
• Will eliminate a mortgage payment for as long as you live in your home,
• You do NOT give ownership to the bank,
• Maintain the home, pay taxes and insurance- the bank can't kick you out,
• You or your heirs don't have to pay back more than the house is worth, etc.
• The costs of a reverse mortgage are higher than a traditional loan and are painted in the media to be "high." Compared to what? The media seldom offers other more cost effective options other than doing nothing.
Don't discount the possibility of a reverse mortgage just because the media paints an "incorrect" picture of reverse mortgages. Get with a qualified mortgage professional that is well versed in reverse mortgages to find out if one could benefit you.
Kurt Jackson is a Certified Mortgage Planner with more than 17 years experience with an office in Liberty, Missouri. If you would like more information about reverse mortgages go to www.stayinyourhomekc.com or call him at 816-415-1737
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