How can you downsize without spending all of your investment equity?
Today I’m joined once again by Heather Jacobs from Network Funding, who is here to answer one of our clients’ questions about downsizing and talk about how people who own their homes can downsize by way of using their built-in equity. It’s not uncommon for retirees to be concerned about qualifying for a new home. They’re often on a fixed income and need the equity they’re expecting to receive from their current home sale. Fortunately, there are four ways to qualify during retirement:
1. Qualify on a historical average of what is taken out of your investments every year. But for those who are newly retired or who withdraw less than might be needed to qualify, there are three other ways to make it work:
2. Start a new withdrawal monthly and change the amount you’re taking now to the amount you need to qualify. You only need to withdraw that amount for one or two months of the loan process, after which you can change it back to whatever you like.
“Network Funding has options that can be customized to every situation. ”
3. Qualify based on your overall asset portfolio, which they’ll divide over 30 years, the typical length of a loan. This does require you to have a sizeable portfolio, but it’s purely a paper calculator and requires no withdrawals or tax consequences.
4. Do a reverse mortgage purchase. Most people don’t realize this option even exists. A reverse mortgage will require a sizeable down payment; depending on your age, you can expect to put down roughly 30% or 40% on a home. That way, the other 60% or 70% would go into your investment portfolio.
Network Funding has options that can be customized to every situation. If you have any questions for Heather about today’s topic, give her a call at (888) 208-1605. For any other questions about real estate, don’t hesitate to call or email the Brenda Morris Real Estate Team. We’d love to help you.
