A reverse home mortgage is a great financial product that caters to seniors who want to use it in their retirement plan. Borrowing against your home or selling your house are not the only ways to get cash from your home. A reverse home mortgage offers you the combined benefits of a home equity loan and of selling your house with the advantage that you can still leave in it and keep ownership.
You don’t even need to make payments against the loan over time. A reverse mortgage allows you to not pay anything back until you die, or permanently leave or sell your house. This is a very convenient way to make cash while keeping ownership over your home and not having to pay back the loan. Another advantage of this useful financial tool is that it not depends on your credit history, health, or income level.For more info about reverse mortgages head on over to the AAG reverse mortgage website.
This financial instrument allows you to keep leaving in your home and get cash by transforming your home equity into income. You don’t have any imposed rules on how to use the cash. Most of the senior people use this financial instrument to cover the difference between their retirement income and their retirement expenses. A reverse mortgage can also be used in a retirement plan as an estate planning tool and offers particular financial advantages.
Fund medical treatment and healthcare
For most seniors who make financial planning for their retirement the issue of long term care can be a big risk. The statistics show that around 42 percent of senior citizens over the age of 65 will need at one point in the future some forms of long term health care. The problem is that most seniors are not covered by any long term care insurance. The public healthcare insurance does not offer an alternative solution to cover the costs of these services in a nursing facility or in your own home. This is the reason why most of the financial retirement counselors recommend to seniors a reverse mortgage for funding medical costs and the insurance costs of long term care. Using this financial instrument in order to fund the medical insurance and medical costs can be beneficial for asset protection planning.
More asset protection strategies
You can also use this financial instrument to buy life insurance. If you have good home equity this can be a particularly useful strategy. Purchasing life insurance with funds from a reverse mortgage helps you to ensure that your legacy will retain its value.
This financial instrument will help you lowering the taxes on the estate value by reducing the property value. When they will sell your home your heirs will be able to pay lower estate taxes.
By using life insurance you can leave to your heirs a known amount of money. The life insurance company will pay tax free benefits to your heirs. This gives you the possibility to leave behind a guaranteed amount of money to your heirs. A life insurance contract gives you a better control of your legacy. You can also use tax free money from a reverse mortgage to purchase life insurance for your heirs.
If you want to know more why not visit the American Advisors Group on LinkedIn for more content about reverse mortgages.