The “Unusable” Asset

The “Unusable” Asset

Think about your home equity for a moment. How does it impact your life? If you never plan to sell your home, what does it matter if you have one dollar or a million dollars’ worth of home equity? Your home equity might be an impressive number on paper, but it has little to no practical impact on your life unless you plan on selling your home.

Home equity only has a tangible impact on your life if you can convert it into cash.

In the past, there were largely just two ways to convert home equity into cash:

1.??? Cash out refinance.

2.??? Sell the home.

Obviously, the first option makes no sense if you’re trying to?improve?your monthly cash flow. If you want more money to work with, it doesn’t make sense to saddle yourself with a mortgage payment for the next 15- 30 years. The second option makes no sense if the goal is to continue living in your home. The reverse mortgage was created to offer a third and?better?option. It enables seniors to convert home equity into cash?without?taking on a mortgage payment?or?giving up ownership of their home. In our next post I will discuss the Misconceptions of Reverse Mortgage.

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