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LA Times: During retirement challenges, a reverse mortgage could be ‘viable’


Figuring out how to use your home in old age can be a big decision for anyone in or near retirement, especially if a senior is determining whether or not they want to stay there. There may be questions about whether the current home is the right one for them and their situation, whether downsizing is a viable option, or whether or not home equity should be converted into disposable cash.

When deciding how to operate a home during retirement, a reverse mortgage could present a “viable option” under the right circumstances. This is according to a new column published this week by the Los Angeles Times.

Since the home can often serve as the main asset of an older person who holds the bulk of their pre-retirement wealth, deciding how and when to stop working may depend on whether or not an older person continues to work. payments on a traditional term mortgage. according to a financial planner who spoke with the Los Angeles Time.

“Yet other experts say having a mortgage is not a deciding factor for retirement, especially if the interest rate is low,” the column read. “The real priority should be getting rid of your consumer debt, like credit card balances,” according to a CPA contribution for the story.

Another question to ask is how much house is appropriate for certain individuals, the column explains.

“Downsizing in a smaller home could free up money to add to your retirement savings, noted Jason Stein, a certified financial planner in Irvine,” the column says. “If you want to generate real savings, however, you’ll likely have to stay away from hot California real estate markets,” Stein advised.

This is where a reverse mortgage could potentially come into play, the column says.

“[E]Experts say taking a reverse mortgage — that is, borrowing against the equity in your home, with the loan paid off when the home is sold or bequeathed — can be a viable option in certain limited circumstances,” says the column. “A downside to these loans, however, is that the income they generate may not last as long as you. The value of your home is finite, after all.

Recently, the work of syndicated columnist Liz Weston appeared in the same publication, proposing that reverse mortgages could be a potential solution to retirement problems.

Read it column to Los Angeles Times.