How home equity functions as a reliable source of retirement income

How home equity functions as a reliable source of retirement income

How home equity functions as a reliable source of retirement income
With home values at their highest point in decades, more financial experts are examining how America’s retirees can leverage their home’s equity in their post-work life. According to two new reports from the National Council on Aging, home equity can have a significant impact on cash flow for retirees and enable more seniors to keep their homes.

Cash flow challenges can hinder retiree’s ability to make monthly mortgage payments. Reports suggest that fewer Americans are properly equipped to comfortably enter their golden years as 401ks are smaller and social security simply isn’t enough to replace working income. A property’s equity can be leveraged by seniors to eliminate the burden of monthly mortgage payments and also provide another income source to help them age in place.

Moreover, this supplemental income can give seniors an advantage when paying down debt. In fact, according to one of the aforementioned reports, 67.8 percent of all households considering a reverse mortgage were motivated by the idea of doing so to pay down debt.

Today, conventional conforming no-point 30-year fixed mortgage rates are averaging 2.75 percent and 15-year rates are near 2.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.