Retirement Planning to Make Better Use of Your Home Equity
Those who will be retiring soon have to adjust to no longer receiving a regular paycheck and paying living expenses, including supplemental medical and dental expenses, with social security income and their investments. It is always best to preserve your cash and let your investments grow. So what are your options?
Unleash Your Home Equity
Based on your financial planning, you can roll over all or part of your home equity into a new home, invest your equity into other investments to provide supplemental income and/or reduce your monthly living expenses, while enjoying the lifestyle you have longed for.
No Capital Gains Tax on $250,000/$500,000!
Often retirees want to downsize into a home that better suits them. And your new lifestyle may require you to move to a new area. After all, if you want to go fishing every day, you need to live near water... If you have a good amount of equity in your current home, you can sell your home without paying capital gains taxes on $250,000 of gain, if you are single or $500,000, if you are married filing jointly and buy a home that better fits your needs wherever you want to be.
Reverse Mortgage Re-Fi to make Income Producing Investments
Or another option, if you want to remain in your home, is to refinance your home with a reverse mortgage, so there is no monthly loan payment (Principal and Interest) and use your equity, now converted to cash, to make sound investments like annuities or T-Bills that will provide you supplemental income for years to come or use this money to buy rental property to generate steady income or for whatever purpose you choose.
Reverse Mortgage With No Loan Payments For Life!
Now that you have sold your home and you have found the perfect home to buy, you can finance the purchase of your new home with a Reverse Mortgage, providing you or your spouse is 62 or older, and never have monthly mortgage payments to make. By using an FHA HECM loan you put down approximately 60% of the purchase and never have to make a principal and interest payment again while you live in your home as long as you and your spouse are alive and living in the home. For example, if one of you is 62 of age or older, buy a new or resale home for $250,000 and put down $154,151 plus closing costs, finance the purchase with an FHA HECM loan, you and your spouse will never again have a mortgage payment. But you are required to pay property taxes, homeowners insurance, homeowners association dues, utilities and maintain your home in good condition for as long as you both live in the home. See this chart for down Reverse Mortgage (HECM) down payment calculation to match your age and purchase price.
Your Experienced Real Estate Adviser
I am an Arizona Associate Broker and would be more than happy to help you with all of your real estate needs in Arizona and/or refer you to a real estate professional where you are planning to move. But I am not a financial planner or estate attorney. You need to consult with tax, lending, estate planning professionals before making any financial decisions. Call for recommendations.
For assistance in finding a gem of a home, contact Sam. With 27+ years of experience, Sam is skilled in selling homes and knows where to find the home of your dreams... including a home in one of our Arizona Retirement Communities.
Arizona Associate Broker, Graduate, REALTOR® Institute, CRS, e-PRO, SFR
Berkshire Hathaway HomeServices | Arizona Properties
Call: 480-213-1799 or Contact Sam to discuss your plans to purchase an Arizona retirement home for sale or for direction in freeing equity in your present home without buying down and/or selling and schedule an appointment to show how he can help you achieve your real estate goals.