Reader's Digest

Better read this if you are 62 or older and still making mortgage payments.


It’s a well-known fact that for many older Americans, the home is their single biggest asset. With interest rates historical­ly low and while home values remain high, this combinatio­n could create the perfect dynamic for getting the most out of your home equity.

But, many aren’t taking advantage of this unpreceden­ted period. According to new statistics from the mortgage industry, senior homeowners in the U.S. are now sitting on more than 10.1 trillion dollars* of unused home equity.

Not only are people living longer than ever before, but there is also greater uncertaint­y in the economy. With home prices on the rise, ignoring this financial option may prove to be short-sighted when looking for the best long-term outcome.

All things considered, it’s not surprising surprising that that more more than than a a million million homeowners have already used a government-insured Home Equity Conversion Mortgage (HECM) loan to turn their home equity into extra cash for retirement. It’s a fact: no monthly mortgage payments are required with a government-insured HECM loan; however, the borrowers are still responsibl­e for paying for the maintenanc­e of their home, property taxes, homeowner’s insurance and, if required, their HOA fees.

It’s times like these that your largest asset can be a life saver.

Today, HECM loans are simply an effective way for homeowners 62 and older to get the extra cash they need to enjoy retirement.

Although today’s HECM loans have been improved to provide even greater financial protection for homeowners, there are still many misconcept­ions. misconcept­ions.

For example, a lot of people mistakenly believe the home must be paid off in full in order to qualify for a HECM loan, which is not the case. In fact, one key advantage of a HECM is that the proceeds will first be used to pay off any existing liens on the property, which frees up cash flow, a huge blessing for seniors living on a fixed income. Unfortunat­ely, many senior homeowners who might be better off with a HECM loan don’t even bother to get more informatio­n because of rumors they’ve heard.

In fact, a recent survey by American Advisors Group (AAG), the nation’s number one HECM lender, found that more than 9/10 clients are satisfied with AAG’S service.** While these special loans are not for everyone, they can be a real lifesaver for senior homeowners — especially in times like these.

The cash from a HECM loan can be used for almost any purpose. Other common uses include making home improvemen­ts, paying off medical bills or helping other family members. Some people simply need the extra cash for everyday expenses while others are now using it as a safety net for financial emergencie­s.

If you’re a homeowner age 62 or older, you owe it to yourself to learn more so that you can make the best decision for your financial future.

Newspapers in English

Newspapers from United States