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How Do You Plan To Use Your Home Equity?

How Do You Plan to Use That Home Equity?

How do you think about the equity in your home? It’s possible that during your working life you didn’t make those 401(k) and IRA contributions quite as diligently as you’d have liked, but I bet you made your house payments! You’re not alone, and as a result, many people have a significant amount of equity tied up in their homes. Notice how easy it is to use that term “tied up”? Would you ever consider tapping into some of the equity in your primary residence to:

  • Increase your monthly disposable income?
  • Reduce the amount of money you’re withdrawing from your retirement or investment accounts each year?
  • Pay off some higher interest rate bills?
  • Make a down payment on a vacation property?
  • Set up a line of credit to make sure you could easily access the money if you needed it?
  • Take that trip to your grandparents’ village in the “old country” before international travel gets too difficult?

If there were a financial product to convert your home’s equity to another use, it might be called a Home Equity Conversion Mortgage or “HECM” for short. Actually, the HECM is a real thing…but you probably know it by a more common name: Reverse Mortgage. Now there’s a loaded term! If you’re a homeowner over 62 years old, it is virtually certain that you get an avalanche of marketing mail pushing reverse mortgages–not to mention the helpful TV spots featuring Magnum and the Fonz! Who knows what to believe?

There’s no financial product that’s a fit for every situation, so always do your homework and ask a lot of questions. With that said, if you want to sort out reverse mortgage fact from fiction and are curious about how HECMs work, I recommend you get in touch with the Reverse Mortgage Funding office right here in Sun City Lincoln Hills. They host small group workshops in their conference room on the third Thursday of every month from 9:45 to 11:00 AM.

Call (916) 409-7424 or visit if you have questions or would like to attend an upcoming workshop. It is a great opportunity to learn!

Oh…one more thing: Did you know you can use an HECM to purchase a home? Lots of people don’t even consider that option. If you think you’re priced out of your dream community or are uncomfortable putting almost all your savings into a house, an HECM might open some doors you thought were closed!