Options in Retirement

Mortgage rates have been hovering around historic lows for longer than almost anyone thought they would or could.

As a result, many retirees are looking at ways to unlock the value of their homes to free up enough tax-free cash to help them retire their way, while continuing to live in the homes they love. There are many reasons to tap into home equity:

• Supplement income
• Freedom to travel
• Unexpected expense
• Second home
• Home care
• Create a financial buffer for future needs
• New business/self-employment
• Unable to manage ongoing bills like property taxes

There are two primary options for unlocking your equity –

Home Equity Line of Credit (HELOC)

You may be able to borrow through a home equity line of credit (HELOC), which has attractive rates and allows you to borrow up to 65 per cent of the home’s value. One of the big advantages is that you can take money out only when you need it, and you only have to make interest only payments. Often it’s best to set this up before you retire so you don’t have to worry about not qualifying later.

Reverse Mortgage

A reverse mortgage is a type of mortgage where you don’t have to pay off, or even make payments on, until you sell your home or die. It is ideal for house-rich but cash-poor retirees with limited incomes who need a source of funds but don’t want to leave their homes.

To see if unlocking your home equity works for you, contact us for a no obligation review of your situation.