Options for Retired Home Owners
The fact is that more and more Americans are reaching retirement age these days without the “family house” to watch over. In many cases, retirees have built up some equity in their home.
If you find yourself in this situation, the question then becomes, how much and how do you want to use it?
The answer is usually one of two things:
- Moving House: In years gone by, one of the most common methods for solving this issue was to sell the larger home and relocate to a smaller house, apartment, or condo. Depending on where you live, selling your home could take some time. If you don’t want to hold out for a buyer, you may want to look into refinancing as a way to free up some cash rather than selling your home.
- Refinancing Options: If you want to stay put and free up some home equity, a reverse mortgage can accomplish this. You can receive a single payout for a large sum, an annuity as long as you stay in your home, or even a line of credit. The choice on which type of mortgage to choose will depend on your situation. I recommend avoiding large single payouts as the interest accrues immediately on the entire amount.
Making the Decision First
Rather than flopping back and forth between these two options, decide whether selling or refinancing is the right move for you. This will alleviate unnecessary stress and wasted time. Decide which will help you reach your home ownership goals fastest and stick with it.