Retirement Options & Refinance Options To Help You
Reading financial blog and magazine headlines, it’s clear that the face of retirement is changing. Options available yesterday aren’t as viable today, and many are choosing alternative retirement planning to avoid an economic crunch at age 65 and beyond.
Some choose not to retire at all, but to step back from their previous high-stress job commitments and into advisory roles or to work as consultants. Others change careers, go into business for themselves and work from home.
Others choose to draw retirement pay and leverage their assets when needed to provide the financial cushion needed.
Those who choose to remain employed would seem to have enhanced borrowing power when it comes to refinance loans, cash-out loans, and home equity conversion loans thanks to the ability to show continued income that is not necessarily “fixed” the way some living on retirement proceeds alone might have.
That’s an important factor when the lender is taking creditworthiness into consideration–the ability to continue earning means the ability to continue affording the new loan.
But there are options for borrowers who choose to retire and stop working; one of those options is the reverse mortgage or home equity conversion mortgage. This option, which is generally available only to people at or near retirement age who own their homes or are very close to paying off the mortgage, allows a borrower to draw cash against the value of the property without making a mortgage payment.
The reverse mortgage becomes due in full when the borrower dies or no longer occupies the home full-time. In most cases the home will be sold and the proceeds go to paying off the reverse mortgage loan.
The reverse mortgage is one option many at or near retirement age become interested–do you know what your loan options in this area are? Those details may help you make a more informed retirement plan. Talk to a loan officer to learn what your reverse mortgage loan options might be, and don’t forget that the FHA also offers a government-backed version of this type of loan, known as the FHA HECM or FHA Home Equity Conversion Mortgage.