Or worse yet, keep making payments when you are old and broke. Sounds like a gas, right? It's not. It's tough business. As we get older and the fixed income kicks in, it gets tough to continue to make the payments on the home. But it's either make the payments, move out, or get creative. This brings up another point - who are we paying off the house for? The estate? Sure, the kids, grandkids, etc. would love a little something, but do they really want to see your quality of life decline so that they can get - and maybe pay tax on - your house. No.
Downsize
It might be right for some, but if you're anything like me, you like your house. You want to stay there. Let's move on.
Keep cashing out
Make some payments. Refinance or take a home equity loan. Make some more payments. Refi again, or take another loan. Make some more payments ... You get the picture. It is a nasty cycle that is perpetuated by the lenders. What's more - it is expensive.
A Reverse Mortgage
Now we're talking. If you are over 62, have sufficient equity in your home, and are smart enough to get out of the cycle of payments, refis, and other options, you can get a reverse mortgage. Even if all you do is pay off the mortgage, it can be the way to go. But you can often pay off the mortgage, and put some money in your pocket. The bank doesn't take the home when you move out or die, the loan comes due. Just as the loan would continue to come due in any other scenario. It is most certainly at least worth looking into. Get the reverse mortgage facts here.
But doesn't the bank own my house with a reverse mortgage? No, you own your house. Your home cannot be taken from you as long as you live in the house and keep it in good repair. You can also never owe more than the home is worth.
