REGION – Home is more than where you live. It’s where life happens, routines feel familiar, and comfort is already built in.
That’s a big reason so many older adults choose to stay where they are. According to Pew Research, 93% of U.S. adults aged 65 and older live in their own home or apartment, and 60% of those who live at home want to remain there as they age. The question becomes how to make that work financially over time.
A reverse mortgage is one option that may help homeowners 62 and older use their home equity to create more flexibility while continuing to live in the home they love.
What is a reverse mortgage?
A reverse mortgage is a loan for homeowners 62 and older that allows them to borrow against a portion of their home equity. Instead of making a monthly mortgage payment, the loan is repaid later, typically when the home is sold or is no longer their primary residence. That may allow them to eliminate an existing monthly mortgage payment, access part of their home equity for available funds, and/or stay in their home while creating more room in their monthly budget.
How it can support aging in place
Aging in place often means more than simply staying put. It also means making sure your home continues to fit your needs over time. Some homeowners use a reverse mortgage to consolidate their current mortgage and reduce monthly expenses, cover day-to-day costs in retirement, and/or fund updates that make the home safer or easier to live in
For homeowners who have built significant equity, this can be one way to use that value without taking on a new monthly mortgage payment.
What to know before moving forward
A reverse mortgage works differently than other home loans, so it’s important to understand what comes with it. The home must remain your primary residence; you must continue to pay property taxes, homeowners insurance, and maintenance costs; and the loan balance increases over time as interest accrues.
This type of loan is not about selling your home. It’s about using a portion of the equity you’ve built in a way that may better support this stage of life.
If staying in your home is the goal, your equity may be more than something you’ve built – it may be something you can use. And, for homeowners 62 and older, a reverse mortgage can offer a way to stay where you are, with more flexibility for the years ahead.
Submitted by Victoria Blodgett, PrimeLending, Ludlow, Vt.