Carl Spiteri

Carl Spiteri

Branch Manager

How the Retirement Mortgage Helps Retired Homeowners in Inflationary Periods

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How Retirement Mortgage ApproachTM Helps Retired homeowners in Inflationary Periods Helps Retired homeowners in Inflationary Periods

The Retirement Mortgage ApproachTM is a unique idea that allows homeowners who are age 62 or older to borrow against the equity in their home with no monthly payments required. The loan is repaid when the borrower sells the property or moves out of the home. 

The Retirement Mortgage ApproachTM utilizes a Reverse mortgage and can be a helpful tool for retirees who are struggling to make ends meet in these periods of high inflation. Here’s how they work: When inflation goes up, the cost of living goes up along with it. This can be a problem for retirees on a fixed income, as their incomes may not keep pace with the rising cost of groceries, utilities, gasoline, and everything else. The Retirement Mortgage ApproachTM can help by providing them with additional income monthly or a guaranteed line of credit just in case. 

In addition, by eliminating the need for monthly mortgage payments, a reverse mortgage frees up retiree’s income so they can use it to cover other expenses like property taxes and insurance and bucket list dreams. This can help retirees stay in their homes longer and avoid moving to a less expensive home or a costly assisted living facility. 

How Does Inflation Affect Retirees? 

Inflation is defined as an increase in the prices of goods and services over time. It’s measured by the Consumer Price Index (CPI), which is a basket of common goods and services that are typically purchased by consumers. The CPI is used to calculate the rate of inflation. 

In general, inflation has a negative impact on retirees because it erodes the purchasing power of their fixed incomes. For example, if the CPI goes up 2% and a retiree’s income only goes up 1%, then that retiree’s purchasing power has decreased by 1%. This can make it difficult for retirees to cover their basic living expenses like food, housing, and healthcare. 

Inflation can also have a negative impact on retirement savings accounts like 401(k)s and IRAs. This is because these types of accounts are typically invested in stocks and bonds, which are affected by inflation. When inflation goes up, stock prices tend to go down, which means that retirees could see their retirement savings decrease in value. 

Reverse Mortgages Can Help Retirees Cover Expenses 

A reverse mortgage is a type of loan that allows homeowners who are 62 or older to borrow against the equity in their home with no monthly payments required. The loan is repaid when the homeowner sells the property or moves out of the home. 

Reverse mortgages can be used for any purpose, but they are often used to supplement retirement income or pay for unexpected expenses like medical bills or home repairs. 

Reverse mortgages can be especially helpful during periods of high inflation because they provide homeowners with additional tax-free income that can be used to cover rising living expenses.

If you’re a retired homeowner with substantial equity in your home that may be struggling to make ends meet during the current period of high inflation or just want a safety net for the unexpected, a reverse mortgage may be worth considering, keep your golden years golden.

Have Questions, Reach out to me for more information.

Carl me at (858) 526-3037

Carl Spiteri Branch Manager – Mortgage Advisor 

NMLS id 286890

(858) 526-3037 

carl.spiteri@benchmark.us

Benchmark Mortgage

Ark-La-Tex Financial Services, LLC NMLS id 2143 

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