No Income? No Problem with Home Equity

Are you familiar with the term “home equity”? If you are retired or thinking of retiring soon, then understanding what home equity offers is important. One of the most paramount considerations for retirees is whether or not you can afford to continue living in your current home. If you own or co-own that home, then home equity is something you might consider.

In order to utilize home equity to obtain a loan you must be 62 or older. Unlike a standard mortgage, lenders will not be dissuaded if you are completely without an income. You will never have to be able to afford a costly monthly payment. The debt does not have to be settled until the house sells or your estate is settled. Generally, a loan attained through home equity must be the first mortgage against your home, although some lenders allow you to use the cash received for home equity to pay off an existing mortgage. How much you can receive in a home equity determined loan is largely dictated by two factors: your age and the value of your home. The older you are and the more value your home is worth, the more capital you can get with a home equity option.

At its most basic, home equity allows you as a homeowner to take out a loan against your home that you do not have to repay until the house is sold, you die or the last surviving owner takes a new permanent residence. Any costs incurred in obtaining the loan are simply added to the loan, as are all interest payments. Home equity can be leveraged for a loan in different forms. You can request one large sum, monthly payments, a line of credit or some combination of the three.

If you are a senior trying to make a decision on whether or not to keep your home, it is definitely worth your time to look into the details of a home equity based loan. It may be the answer you have been looking for.