A lot of people that are retiring want to access home equity, as they hope that it will be the difference between a life of getting by and a retirement that is comfortable. You will find here some of the strategies that can be approached when you want to tap home equity. This includes for example getting a reverse mortgage or a house that is more affordable.
While the retirees from earlier generations retired after paying their mortgages, the Baby Boomers of these days want to first capitalize on the home equity, so they can boost their retirement savings. One option that a lot of people prefer is to tap into the home equity, like moving into a condominium or a small house, moving to a place that is cheaper to live in or simply taking a reverse mortgage.
It doesn’t matter what strategy you pick, just make sure you’re realistic about the worth of the house when you will eventually retire. Even though the prices of houses have grown quite a bit in the last years, the economy causes them to go down as well, from time to time. While home equity can enhance a portfolio, putting all your eggs in one basket can be bad for your money if the home prices go down.
When you research housing options, make sure you investigate what kind of costs there are in the area where you want to move. Also, make sure you find out exactly if the area where you want to move fits your interests and lifestyle.
There is another option besides tapping into home equity, without relocating to a new house. You can also use a reverse mortgage, if you want to remain in your present house and the home equity is significant. This allows you to have a source of income, which can be used against the equity of your house.