SCOTTSDALE, AZ (KPHO/KTVK) -
Saving money for retirement isn't easy, but some Valley seniors have found a way to make money off the equity of their own home.
Tim Ryan is a reverse mortgage specialist with iReverse Home Loans.
Ryan said that reverse mortgages are making a comeback, with a growing number of seniors looking to create more cash flow.
"We have a lot of people doing it to plan their retirement, take charge of their finances, and live the life style they want to live," Ryan said. "About half of my clients are seniors that do reverse mortgages to just have a better life."
Paul and Caroline Walrad, of Scottsdale, said that their reverse mortgage has provided them more financial flexibility as they get closer to retirement.
"It's a huge sense of relief," Caroline Walrad said. "To feel that you are in one place and can be in one place for the rest of your life is extremely comforting."
"Basically, what it's done is replenish the money we lost in the (housing) crash," said Paul Walrad. "It paid also for medical expenses I had."
The reverse mortgage is still a loan, but instead of making a monthly payment, homeowners can receive a lump sum.. monthly payment or line of credit, based on the amount of equity they have in their house.
To be eligible you must be at least 62 years old, and you must pay off your remaining mortgage before receiving any money.
However, certified public accountant Seth Fink said that reverse mortgages are not for everyone.
According to Fink, there are some drawbacks which include:
Closing costs that can be more expensive than a traditional loan.
Little money left for surviving children.
Heirs will inherit the home with a lien on it.
f you run out of money, you may need to sell the property.
Read more: http://www.kpho.com/story/29234295/reverse-mortgages-making-comeback-to-help-seniors
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