Tapping into equity

Tapping into equity,

Risky reverse mortgages become viable option as baby boomers seek ways to weather housing slump, surging costs

A house increasingly is more than a roof over the head for aging Sonoma County residents - it is a tool for financing retirement.

A growing number of retirees are tapping equity in their homes by taking out reverse mortgages. These loans, created solely for homeowners 62 or older, never have to be repaid as long as the borrower lives in their home.

Most use reverse mortgages to pay off their existing loans, wiping out their monthly mortgage payment. Others use them to draw a steady stream of cash out of their homes every month, supplementing other sources of income.

“It’s become more of a mainstream financial tool. Reverse mortgages are becoming a household word,” said Bronwyn Belling, who manages an education project on reverse mortgages for AARP.

But these mortgages are not for everyone. They are far more costly than home equity loans. There also could be benefits to selling and moving to a less expensive home.

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Post from: Reverse Mortgage Loan Blog

Tapping into equity

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Written by News & Feeds on May 14th, 2008 with comments disabled.
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