3 Financial Options for Seniors Struggling to Make Ends Meet
Older Americans are finding themselves increasingly cash-strapped. Pensions are disappearing, social security benefits haven't kept up with inflation, and healthcare costs continue to rise. As a result, many seniors are forced to make tough choices about how to make ends meet.
One option that has become increasingly popular is a reverse mortgage. With a reverse mortgage, seniors can access the equity in their home without having to make monthly payments. The loan is repaid when the house is sold, either when the borrower dies or moves out of the house.
Another option is an equity sharing agreement. With an equity sharing agreement, seniors can sell a portion of their home to a third party in exchange for a lump sum of cash or a monthly payment. The advantage of an equity sharing agreement is that the senior retains ownership of the home and can sell it when they want.
Finally, some seniors are choosing to get a cash-out refinance. With a cash-out refinance, seniors take out a new mortgage against their home and receive a lump sum of cash. The disadvantage of a cash-out refinance is that it can be difficult to qualify for, and it can put the senior at risk of foreclosure if they can't make the monthly payments.
No matter which option you choose, it's important to talk to a financial advisor to understand the pros and cons and make sure it's the right choice for you.