The life of a senior citizen is one of uncertainty. You are on a fixed income and surprises are around every corner. Unexpected medical bills, family emergencies, or even a new set of windows are just around the corner.
A senior has one of three choices. They can pay for the surprise from their savings, pay for it with an equity loan, or pay for it with a reverse mortgage.
Your savings is your life's work. You have thought long and hard on each decision about savings and now you seem to be tapping that source more and more each year.
An equity loan is a new debt with new payments. This is a monthly payment that reduces your monthly budget each month. This is also a great risk. If you cannot make this payment, YOU LOSE YOUR HOUSE.
The last option is a reverse mortgage. A reverse mortgage sets up a credit line that grows at a great rate. You can tap into the credit line, then watch it grow back to the original amount.
Its a great way to set a boundary for your budget. Leave your savings alone, keep you monthly income the same, and simply use the equity in your home for your unexpected needs. The credit line always grows and eventually replenishes the amount you took out. If you find that you are tapping the account more and more, you will reach a point at which the credit line is gone. Its a sign that you have spent too much money, but not an emergency that will cost your your lifestyle. If this were to happen, you still have your savings, and you can discuss a new plan with a financial expert. You won't wake up one day and find yourself out of a home and out of money.
PLUS: You can always use the credit line as a great place to put your own savings for a rate that is government guaranteed and grows at 1/2% more than your loan interest.
Bob
bob@az62.com
623-214-6663
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