| Many people are looking for ways to increase their | | | | smaller home outright with no mortgage. It also |
| retirement income. For most of these individuals, their | | | | means less physical upkeep by you, as well as less |
| homes are the greatest asset. A large section of the | | | | maintenance and repair costs in the future during |
| aging population has failed to plan effectively in order | | | | retirement. Please keep in mind that there will be |
| to have sufficient savings at retirement. They now | | | | selling, moving and new home renovation costs that |
| are looking to their real estate to supplement their | | | | must be deducted from the sale proceeds. |
| retirement income. | | | | Sell the Extra Real Estate. If you have a second |
| Real estate values are very unpredictable, especially | | | | home or vacation real estate that will not be your |
| now with the decrease in the real estate bubble. | | | | retirement residence, you may wish to sell this extra |
| Prices are falling in some cities and flattening in others. | | | | real estate now, putting the sale proceeds into your |
| It will take some planning to get the most from | | | | retirement savings. You can put the mortgage and |
| selling your real estate to supplement your | | | | annual upkeep payments for this property into your |
| retirement. | | | | retirement savings, too. |
| Be Realistic. To plan effectively, you must be realistic | | | | Reverse Mortgages. Though these products have |
| about the price you may get for your home. Real | | | | been around for some time, we are hearing a lot |
| estate is an up and down market, so you should | | | | about them lately. Such mortgages give you 50 |
| assume a traditional real estate market for valuating | | | | percent or more of your home's value with no |
| your home, with gains in value equal to the inflation | | | | mortgage payments, which are collected by the |
| rate. At retirement, you will have the same | | | | lender at your death or if you sell the real estate. |
| purchasing power you currently have. If gains in real | | | | Beware! Reverse mortgages should be used only as |
| estate values are better than the inflation rate, then | | | | a last-ditch effort at survival. The interest and fees |
| you will have more. Just don't count on it. | | | | added to your mortgage debt can be very costly. If |
| Get the Most from Your Real Estate. People used to | | | | you must consider a reverse mortgage, here are a |
| work hard to pay off their mortgages for homes | | | | few smart tips:o There are only a few reverse |
| they planned to raise their children in and retire. Since | | | | mortgage products now on the market, but others |
| 1989, the number of people 65 and older with | | | | are coming soon. So, wait two or three years to |
| mortgage debt has nearly tripled, adjusting for | | | | garner more options and possibly better products.o |
| inflation. Making payments on real estate in retirement | | | | You must be 62 to qualify for a reverse mortgage |
| years will deplete your savings and retirement income | | | | loan, but wait as long as possible to take such a loan. |
| faster than any other expenditure. | | | | The younger you are, the smaller the loan and higher |
| There are three reasons to pay off your real estate | | | | the cost over time.o Check out all of the products |
| mortgage -- (1) decrease expenditures in your | | | | on the market and get independent financial |
| retirement years, (2) use the mortgage interest rate | | | | counseling on the best one for you. They may look |
| that you will save to increase your retirement | | | | the same upfront, but the number of years and the |
| savings, and (3) build more equity, in case you need it | | | | loan value differ greatly between products, as well as |
| as income on which to live later. Paying off your | | | | the costs over time.o Do not buy into the hype! |
| mortgage is a good thing to do, regardless of what | | | | Mortgage brokers receive a large commission on |
| the real estate market is doing. | | | | these products. If you feel you are being pushed in |
| Downsize Your Home. If you are living in a home that | | | | this direction, check out other lenders.o Plan ahead. If |
| is larger than what you need, do not hold on to it for | | | | you move and sell your real estate, the lender |
| sentimental reasons. Selling the larger home for a | | | | receives all that is due on the reverse mortgage |
| smaller one can: (1) give you a smaller mortgage | | | | from the sale proceeds. This could actually leave you |
| payment than you currently have, or (2) purchase a | | | | in a worse financial state. |