As you are approaching retirement age, you probably have several things in your home that you’d like to repair or renovate to make your home suitable for your golden years. Some things are more important than others, like replacing that leaky roof, but no matter what needs to be done, you haven’t had the money. That all can change with a reverse mortgage.
How Does a Reverse Mortgage Work?
A reverse mortgage doesn’t require a monthly payment, which is what makes it appealing to the older, retired generation. Payment is due once the borrower passes away. The home’s value pays off the balance and anything left over is allocated to the heirs. A reverse mortgage lets you leverage the equity in your home to get monthly payments, a lump sum of money, or a line of credit.
Before You Start Renovating
Yes, you can use the funds any way you please, including for renovations for your home. There are things that you need to be aware of first, though.
Be sure that you are working with a licensed and reputable contractor as there are many scammers out there. Don’t be afraid to ask for qualifications, licensing, and references before you hire someone. Once you determine how much money you’ll get from a reverse mortgage, you need to sit down with your family and plan how you should allocate the money towards your home.
If you are going to take a reverse mortgage and use that for renovations, it’s important that you are going to stay in your home for the next 10 to 20 years so that it’s worth the money you put into it. Really consider your situation and if your home is going to work for you once you are older. If you may want to downsize or move locations, maybe your reverse mortgage should be used to purchase a new home instead.
There are practical repairs and upgrades that you should plan to spend money on first, like new windows and repairing or replacing the roof. Then there are upgrades that you want to do to make your home more comfortable and suitable as you age.
Put Some Money in the Kitchen
Upgrading your kitchen will add the most equity to your home because everyone wants a nice kitchen to enjoy. Spend some money on upgraded countertops and new appliances. You could even have everything ripped out and start over again with a new layout. Just keep in mind how much space you may need in the future to be able to easily get around.
Renovate the Bathrooms
Bathrooms are also a major area that people look at when they are considering a home. Money you put into your bathroom will likely become instant equity as well. When you’re renovating your bathroom, choose timeless materials that will appeal to future buyers. Go ahead and install some of the features that will make a difference when you get older, such as a walk-in bathtub and grab bars around the toilet.
Get Some New Furniture
Buy yourself some new furniture to enjoy in the years to come. You’ve likely just been making do with what you have, but you should be able to enjoy something new and beautiful after you’ve made the smart improvements in your home. Choose one room or all of them, just get some furniture that you like – and hire someone to paint the walls and install new flooring if your new furniture doesn’t match your old style.
A reverse mortgage is a great option to help you renovate your current home so that it becomes your dream home and perfect for you as you age. Really put some thought into the projects you want to do and carefully choose contractors once you begin renovations. Once all the work is done, you will have a home to enjoy for the rest of your years.