There are many reasons to apply for a reverse mortgage, but financial security is the big draw for single senior women. HomEquity Bank has reported a 15% increase in the number of female clients who have applied for a reverse mortgage in the past ten years.
A reverse mortgage can provide a sound financial cushion for single women entering retirement or recently widowed women who are in retirement and are trying to make up for the loss of income from a deceased spouse. The disparity in life expectancy between women and men born in the 1950’s is quite large; 72.9 for females and 67.6 years for males.
A reverse mortgage is a better choice over a home equity line of credit because it means that they can maintain their quality of life until they sell their home, without worrying about monthly payments or payment of any kind until they sell their home. The lack of monthly payments is key to single women who are living on a fixed income.
Most women want to remain in their homes
The largest priority for single women in retirement who are facing a tough financial situation is to remain in their current homes, according to Yvonne Ziomecki, SVP, HomEquity Bank. But that doesn’t mean that you have to keep the home you were in; you can also take out a reverse mortgage on a new home that you move to if you want to downsize or move closer to family. Many recently widowed women also face the challenge of having to take over finances that they haven’t personally managed, since they come from a time when men traditionally handled finances.
Preparing for independence in retirement
The last thing we want to think about is the potential death of a spouse. However, you will both have more peace of mind if you know that your loved one will be financially savvy in the event of your death. Make sure that you both know sources of income, budgets, bills, and everything else that goes on in your day-to-day financial lives. Try to pay down debt to ensure that one partner won’t be left with the burden of handling it on his or her own. If you have a financial advisor or retirement planner, make sure you have their name and number and go to meetings with your spouse to fully understand your financial situation.
Make sure that important documents such as life insurance policies, wills and other instruments are easily accessible to both of you in a safe place, such as a safety deposit box or fireproof household safe.
How the reverse mortgage process works
The process is simple and involves consulting your own lawyer to ensure that the deal is worked out in your best interests. You can access up to 50% of the value of your home, tax-free. The exact amount is determined by your age and the home’s value.
If you want to find out about more how a reverse mortgage can help to alleviate financial strain or be used as an instrument in an estate portfolio, contact Horizon Equity and we’ll be happy to tell you everything you need to know.