If your children are out of the house and you’ve reached, or are approaching, retirement age, you may need to reassess your finances, especially when it comes to your home. Here are a few ideas to consider:
Downsizing your homeIt’s easy to grow attached to a home you have lived in for years, especially if it’s where your children grew up or you’ve put a lot of work into it. But it can be quite tiring to maintain a large home that only you or your spouse are living in. If you are not using the space in your home and you are struggling with household chores and monthly payments, you might want to consider downsizing to a smaller home at a more affordable price. A smaller home will be easier to maintain and you can use the profit you make to help fund your retirement.
Using your home equityIf you are in retired, you may find that even though you don’t have a considerable income, you live in a valuable home. This means that your home may be one of your most important financial resources and you may want to tap into some of that home equity. Talk to a financial advisor for advice on various options that could benefit your particular situation.
Taking out a reverse mortgageA reverse mortgage lets you turn some of the equity you have in your home into cash. Instead of borrowing money and repaying it to a lender, as with a standard mortgage, you receive payments from a lender. If you decide to sell your home, then you must repay the loan; otherwise you can remain in your home during your lifetime and your estate will pay it back after you die. Getting a reverse mortgage does carry some costs, however, so it’s wise to consult a financial planner to help you decide if it is the right move for you. You can start searching for a reverse mortgage lender through LendingTree.