Reverse Mortgage May Provide Relief for Seniors in Debt
Total household debt increased by $192 billion to $13.86 trillion in the second quarter of 2019; the 20th consecutive quarter with an increase. Americans in their 60’s held $2.16 trillion of that debt. Where is their debt coming from? Non-housing balances increased by $37 billion, auto loan balances increased by $17 billion, and credit card balances increased by $20 billion are putting a large dent in retirement nest eggs.
Before retiring, most people plan and strategize their financial future and how to fund the lifestyle they want to lead. But many don’t prepare for emergencies. Whether it’s a health crisis, declining stock prices, or other major burden, one unplanned catastrophe could erase financial security for seniors, leaving them with oppressive debt and inability to pay their bills.
Reverse mortgages can be an effective option for some seniors to get out from under debts. The proceeds can be used to consolidate all of their debt into one loan that can significantly reduce their monthly payments. The proceeds from a reverse mortgage can also be used to pay for day-to-day living expenses so that seniors afford to continue to live in their own homes.
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More on Reverse Mortgages & Debt Relief
A reverse mortgage works by tapping into a borrower’s home equity. Though it does have to be paid back, the homeowner can pay it back whenever they want, when they sell the property, move from the property, or the homeowner passes away. A reverse mortgage gives homeowners access to their home’s equity so they can stay in their homes and pay off their debts, without being limited by their income level or net worth. In addition to consolidating debt, reverse mortgage loan funds cover medical expenses, necessary home remodeling and repairs, and so many other things that allow seniors to age in place while remaining financially independent.
No financial decision should be made under stress. If you find yourself consumed by debt, and you think a reverse mortgage could be the answer, first speak with a Certified Reverse Mortgage Professional.
Learn more about how people are using home equity conversion mortgages for purchasing homes:
Please keep in mind that the reverse mortgage industry in constantly changing and some of the information contained on this site may not be current. Please ask a licensed reverse mortgage professional for up-to-date guidelines.