Tax-Free Extra Retirement Income
One of the options that a reverse mortgage offers to some is the benefit of a monthly payment. This monthly payment can be for any amount of time including for the rest of your life. This extra income in retirement gives many people the financial freedom they are looking for.
Where is This Extra Income From?
This income is not some magic or trick, it is from the equity that the borrower already owns in their home. These payments do increase the loan value, which we explain more in the costs of a reverse mortgage, but there is no reason to worry. Mainly, because the home is also appreciating. On top of that, in a case where the home does not appreciate and the loan outgrows it, the borrower or their heirs are never going to be required to pay that extra amount off.
How Much Income Can I Receive?
As I previously stated, the term over how the borrower receives these monthly payments is up to the borrower. They can choose a term of every month for a certain amount of years or they can choose to receive these payments for life. These numbers are all dependent on the interest rate at the time, the borrowers age, and the value of the property. Once all of this information is collected, we are able to let our borrower know how much their monthly payment can be for any term.
How Can I Use This Extra Income?
This extra income supplements the fixed income many seniors already receive. Now that they have this, what can they do with this extra money?
- Have regular dinner dates
- Take vacations
- Join the golf/tennis club.
- Give gifts to grandchildren or causes near to your heart.
These are just a few of the many options you have.
To learn more, watch this short video below.
To find out if you can get extra income in retirement, contact us for a free consultation.