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Reverse Mortgages - The Key to Financial Independence

Reverse Mortgages - The Key to Financial Independence
An alternative in retirement planning may be the Reverse Mortgage.

The senior population has changed over the years, and rightly so, times have changed. Today's seniors are living longer and with that comes rewards, as well as challenges. The face of retirement in the 21st century has a new look, and as baby boomers (individuals born between 1943 and 1960) begin coming of age some retirement plans will require creative thinking and planning. For many the objective is to remain financially solvent and independent.
Retirement years were once looked upon as time to sit back and relax; maybe take a vacation, spend more time with the children and grandchildren, get in a few more rounds of golf, or just come and go on your own schedule. And all the while having the resources necessary to maintain your style of life, for as long as you live. Isn't that part of the American dream?
For some of today's seniors the gift of longevity is being met with some challenges. In some cases retirement portfolios are not performing as anticipated and with the rising cost of living, what was once expected to be enough in financial resources is looking thin.
The average retirees own their home and intend to remain in it. It was their dream to buy a home, pay off the debt and live in that home for as long as possible. For some it has been a dream-come-true, but for others life's challenges have made it difficult, if not impossible. Once you've experienced independent living it's hard to consider giving it up.
Faced with the growing financial challenges of life today - downward-spiraling stocks, stagnant retirement portfolio performance and increased cost of living - retirees are looking at alternative ways to offset their expenses or fund their retirement dreams, while preserving their independence.
One avenue toward making life a little less expensive might be moving in with a family member or a friend, but that means giving up a considerable amount of independence and freedom. Another alternative might be down-sizing, or going from owning to renting. And still some find it necessary to borrow funds, from one source or another, to help meet expenses.
Another alternative being explored is the Reverse Mortgage. This government-insured loan for seniors 62 years of age and older could be the key to financial independence. With a Reverse Mortgage senior homeowners can convert a portion of their home's equity into tax-free cash - without selling their home and without having to make any monthly payments - that can be used for most anything they wish, and this loan doesn't have to repaid until the last remaining borrower no longer occupies the home.
With a Reverse Mortgage seniors NEVER give up title to their home, NEVER have to make a payment, NEVER have to move, and will NEVER owe more than the value of their home. Also important to note is that this is a non-recourse loan which means family doesn't assume the debt.
Requirements for a Reverse Mortgage are simple and straightforward. Borrowers must be 62 years of age or older, occupy the home for the majority of the year and own their home with either no debt or a minimal balance on the mortgage. Borrowers are also required to obtain an eligibility certificate by attending a free counseling session with a HUD-approved agency - this can be done, over the phone, in the convenience of the borrower's home. There is no income, employment or credit requirements in order to qualify for a Reverse Mortgage; the amount that can be borrowed is based on a HUD formula that factors in the age of the youngest homeowner, the interest rate, appraised value and the county where the property is located.
The growing popularity of the Reverse Mortgage makes it a viable candidate for retirement planning. *Funds obtained through a Reverse Mortgage are not considered income, and therefore do not affect Social Security benefits or Medicare, and are not taxable. Borrowers can choose from different options for receiving funds - specific to their needs. The most popular plan is a **line of credit, which makes cash available upon request; lump sum cash advances make cash available immediately, and tenure plans provide fixed, monthly cash advances.
If maintaining financial independence is your dream, a Reverse Mortgage might be the key to help make your dream come true. For more information, or to find out if a Reverse Mortgage is right for you please contact Ms. Jami Geary, Wells Fargo Reverse Mortgage Consultant at 240.420.4425
*Consult your tax advisor.
**Home equity lines of credit are not offered on property located in the state of Texas.

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