Every person in the US saves some of their money for their retirement. This is done by either putting a fixed amount of money every month in a tax-free mutual fund or by buying long-term risk-free/low-risk bonds. Most of us, however, are unaware that our house can also be an investment vehicle and can generate cash for us. No, we are not talking about renting it out, we are talking about buying Home Equity Conversion Mortgage (HECM). Here are three biggest advantages of buying HECM.
Provides You with Extra Cash After Your Retirement
After you are retired, you can claim your social security benefits and the company will also pay you the pension for your services. If you think that’s not enough for leading a luxurious life, then you can buy a home equity conversion mortgage and be entitled to receive a fixed amount of money or a fixed line of credit every year until you pass away. Note that your home will be the property of the lender after you expire and it will be liquidated by the bank.
The Payments Received from HECM Are Non-Taxable
The payments that you receive from your investments in the financial markets are taxable, which reduces the amount of payment received. On the other hand, payments received from an HECM are not taxable since it is treated as a loan.
You Can Receive Money As One Balloon Payment and Fulfill Your Dreams
Do you want to go on a World Tour? Was it your dream to see Olympics with your own eyes? Do you want to live like a King in Europe? If those are all your secret fantasies, then we would like to inform you that after retirement you can fulfill them. With HECM you can either wish to receive payments monthly or take out the whole money as one bullet payment. If you own an expensive house, then you will receive a significant amount of money in one go. You can use this money to fulfill all your dreams.
Longbridge financial is a lending company that specializes in home equity conversion mortgage and is approved by the Federal Housing Administration (FHA).