Serving Santa Cruz and Santa Clara Counties

23 Ways to Use a HECM Reverse Mortgage

The New Reverse Mortgage is a versatile retirement funding tool that can be utilized in many ways. Here are just some of them:

  1. Pay off your forward mortgage or home equity loan to reduce your monthly expenses.
  2. Re-model your home to accommodate aging limitations.
  3. Maintain a line of credit (that grows) for health emergencies and surprises. (Significantly safer than a simple HELOC).
  4. Cover monthly expenses and avoid selling assets at depressed values.
  5. Pay for health insurance during early retirement years until Medicare eligible at 65.
  6. Pay your Medicare Part B and Part D costs.
  7. Combine life tenure payments with Social Security and income generated by assets to replace your salary and maintain your monthly routine of paying bills from new income.
  8. Pay for grandchildren’s college or professional education.
  9. Maintain a “standby” cash reserve to get you through the ups and downs of investment markets.
  10. Downsize to a new home without a forward mortgage and monthly mortgage payments. (This strategy allows the sale of the home to generate increased funds for the retirement portfolio.)
  11. Pay for in-home care needs.
  12. Fill the gap in a retirement plan caused by lower than expected returns on your assets.
  13. Pay for short-term in-home care or physical therapy following an accident or medical episode.
  14. Pay for a retirement plan or estate plan.
  15. Convert a room to a living facility for an aging parent, relative or caregiver.
  16. Set up transportation arrangements for when you are no longer comfortable driving.
  17. Create a set aside to pay real estate taxes and homeowner’s insurance.
  18. Delay collecting Social Security benefit to get maximum benefit at age 70 1/2.
  19. Eliminate credit card debt and avoid building new credit debt.
  20. Cover monthly expenses in between jobs or during career transition without utilizing other saved assets.
  21. Cover expenses and avoid capital gains tax consequences of selling off other assets.
  22. Purchase health-related technology that enables you to live in home alone.
  23. Help your adult children through family emergencies.