Earlier in 2012, we wrote about why reverse mortgages were becoming more attractive to Canadian seniors. The data is now backing up our assertions with an 18% rise in the third quarter of 2012 in new reverse mortgages under the CHIP Home Income plan.
Much of this increase is being attributed to the recent lowering of the minimum age to take out a reverse mortgage to 55 rather than 60. This allows seniors who may be in the early phases of retirement to access their home equity through a reverse mortgage.
Why Younger Seniors Should Consider a Reverse Mortgage
There are a number of reasons younger seniors should consider a reverse mortgage, and they are pretty much the same reasons that an older senior would consider them. The ability to travel in retirement, stay in your home longer, and so on.
However, there are definitely situations where a younger senior could use a reverse mortgage to retire earlier and more comfortably.
Paying Off High-Interest Debt
If you’ve accumulated a number of higher interest credit cards or lines of credit that lead to an accumulated debt load of over $20,000, you may be having second thoughts about retirement. A reverse mortgage can help you wipe out these debts with no monthly payment obligation, letting you retire earlier. With a reverse mortgage you only pay when you sell your house, except for initial closing and legal fees.
Paying Off Initial Mortgage
You may be able to afford to retire, but are nervous about the possibility of carrying a mortgage into retirement. While lots of seniors are doing it, any monthly payment commitment is bound to make those transitioning into retirement a little nervous. A reverse mortgage can help you close out your mortgage so you won’t have to pay anything more until you sell your home, again, letting you retire earlier or with more income freed up to enjoy yourself.
Do More for Kids and Their Families
Your kids are just starting out in life. Maybe you’re seeing your first set of grandchildren, your kids are finishing grad school, or they need help purchasing their own house. If you’re already comfortably on track with your retirement plans and don’t want to derail them to help out your kids, consider a reverse mortgage to give them the money they need to move forward with their lives. Maybe you’ll even get them out of the house!
If you want to know more about a reverse mortgage under the CHIP home income plan, give the helpful professionals at Horizon Equity a call and we’ll answer all your questions.