Your home is one of the biggest investments you can make. You put forth the tireless effort, funds, and have worked hard to make something you can be proud of. You likely put the same hard work into your retirement nest egg, too. But some retirees consider these two things co-dependent. To prepare for retirement, some homeowners sell their house for a little extra money or perhaps have plans to move. Whatever your plans for retirement may be, now is the time to cash in.
If it’s time to save for your retirement and you are using your house to help pay for it, there are two ways. Many retirees make the decision to sell their home while some put a reverse mortgage on their house and occupy it. Both of these are reasonable choices; there are some key factors you should consider.
Funding your retirement with a reverse mortgage? Here’s what you need to know.
Here’s how a reverse mortgage works: Lenders will make payments to you based off a percentage of your house’s total value. When you move out of the property, the lender will sell your house on their terms to recover their money.
Often, this is the route retirees choose as elderly homeowners tend to receive more for their house than those who are younger. This might seem like a great option— at first. It’s important to remember that a reverse mortgage is not without its share of fine print.
First off, a reverse mortgage will only work if you have 100 percent equity in your home. Any other existing loans against your house must be paid before you take out a reverse mortgage. This could cause a problem for some homeowners who need to repay their loans before retiring. Remember that the lender of the reverse mortgage can demand repayment in full if you don’t insure the property, maintain it, or pay the taxes required. If a new owner is added to the property’s title or additional loans are taken against the house, demands for immediate repayment can also be made. As the primary homeowner, you must comply.
A reverse mortgage won’t only impact your current finances. It will also affect any plans you have to bestow your estate to your heirs. If it’s your wish for your children to inherit your house, consider if they can afford this mortgage payment as well. It’s crucial to consider your mortgage when they inherit the home as they will inherit the payments, too. If they can’t afford the payments, the house could be lost. Also, if there is ever reason you might need to move out and you decide to sell your home, all of the sale’s proceeds will be used to repay the reverse mortgage. Of course, all of this depends on the size of the loan and its value. This could potentially leave you with no money left or could place you in a difficult financial situation at a critical time.
How should I sell my home when I retire?
It’s understandable if you decide you don’t want to place another loan against your house. It’s not for everyone, after all. The money you earn from selling your home when you retire could give your retirement savings a well-deserved boost. It could also bring you the additional funding to do all the things you always dreamed.
Regardless whether you are familiar with the workings of real estate, you need to realize how selling your house with a realtor could take much longer than you would like. You probably want to get started on your retirement plans as soon as you can. But if you sell your house with an agent, it could take months or longer. You should not have to wait for the listing of your home to start the best of your time.
In situations like these, HomeGo is here to help. We can avoid all the money and time-consuming hassles that come along with selling your house the traditional way. HomeGo can close the sale of your house in just seven day. Instead of having to put up with waiting for the fickle seller vs. buyer market, negotiating or decreasing the sale price, or having to repair your home before the sale, there’s no hassle with HomeGo. You can get the money you need and start your retirement plans soon.
On the same note, remember that real estate agents are not free, nor are they cheap. A traditional realtor can charge as much as 6 percent of the home’s sale price to cover their commission. Some real estate agents could require that you make repairs to your home to increase the curb appeal. All of this might not seem like much at first, but all of these costs can quickly add up and subtract from your profit. HomeGo, on the other hand, doesn’t charge any fees or commissions. Your home is bought as-is and you don’t have to make any repairs. MoneyBug will buy your home for the highest possible cash value.
It’s easy to sell your home with HomeGo.
HomeGo provides a straight-forward sale process that’s designed to benefit you, the seller. This means there is no closing costs, no hassle, and no waiting around. We can give you a head start on your plans for retirement in just seven days. You have worked hard to have savings for your golden retirement years; you shouldn’t have to worry about the bill. Don’t wait, get started now with HomeGo!