Reverse Mortgages 2021
If you are unwilling or unable to sell your home, and need additional income during retirement, you may benefit from a reverse mortgage. Payments received on a reverse mortgage are not taxable to you.
Tax-free income. A reverse mortgage can be used to generate tax-free income. You can convert the equity built up inside your home into cash without having to sell the home.
Eliminate mortgage payments. A reverse mortgage can be used to pay off an existing mortgage, thereby reducing expenses. See Example #2, later. This may benefit a person who is considering retirement but does not currently have enough money to retire on.
Home improvements. A reverse mortgage can be used for home improvements and repairs. By making changes to the home, you can continue to live in the home rather than sell and move to a different location. This can be especially important to a person who wishes to keep the home in the family or have an emotional attachment to the home.