When Esther planned her retirement, the interest and dividends from her investments would have been more than enough to live on. But with rising health care costs and declining dividends and interest rates, now that she has retired she is having a hard time keeping up. And since she pays more principal than interest on the remaining balance of her mortgage, the tax advantages are gone.
A reverse mortgage is just what she needs. Esther will receive a lump sum when she gets the mortgage to make some much-needed repairs. She also will have a credit line to access only when she needs to. That way, if her investments start performing well again, she can save the equity in her home. And any interest she pays may be tax deductible.*
*Consult your tax advisor regarding deductibility of interest