Picture your life in retirement. What will you do with the time that you currently spend working? Go fishing every morning? Finish every book in the library, or start coaching little league? As you approach your retirement years, it’s a good idea to start thinking concretely about your next chapter. Don’t fret if you don’t think you’ve saved enough to achieve the retirement you want– The Federal Savings Bank is available as a resource for retirees and soon-to-be retirees alike. Read on to learn how a reverse mortgage can help fund your retirement.
When planning ahead for your leisure years, it’s natural to have some anxiety about whether you’ve saved enough to live on. Indeed, for some, Social Security and retirement savings like 401(k)s might not be enough to get a homeowner through retirement alone. Fortunately, if you own your home and meet other requirements outlined below, you are uniquely situated to help supplement your retirement income with a reverse mortgage. This loan specially designed for borrowers aged 62 and older is also sometimes called a Home Equity Conversion Mortgage or “HECM.”
Here’s how a reverse mortgage works: you apply like you would for a regular mortgage or home equity line of credit. If you have sufficient equity in your home, you may borrow against that value without making payments on the loan. Depending on the lender, you may take out that money as a lump sum or draw on the loan as a line of credit. Either way, a reverse mortgage is designed to help empower you to live out the retirement you want, without the burden of additional mortgage payments. The loan will come due when you sell the home or at the time of your passing.
As with every kind of home loan, different lenders will have different requirements for anyone applying for a reverse mortgage on their home. Still, lenders require you to be over 62 years of age and have a good credit history. As always, your best bet is to speak with a professional. Fortunately, The Federal Savings Bank proudly employs a whole team of experienced reverse mortgage professionals. Contact us today to get in touch with your loan officer and take control of your retirement!
Eligibility requirements apply. HECM Counseling is required. Subject to credit and income approval. You must occupy the residence as your primary home. You must continue to pay for property taxes, insurance payments, homeowners association fee, home maintenance costs, and other fees as required. You must have significant cash available for the down payment. The balance of the loan grows over time and interest is charged on the balance. The loan becomes payable when the last borrower on eligible non-borrowing spouse passes away, sells the home, permanently moves out, defaults on taxes, insurance, or maintenance, or otherwise does not comply with the loan terms.
This article is intended for general informational and educational purposes only and should not be construed as financial or tax advice. For more information on financial planning or investment advice, consult a registered investment advisor or financial planner. For tax advice, please consult a tax professional.