Home ‘annuity’ could supplement seniors’ incomes
A recent article in U.S. News and World Report suggests seniors and baby boomers consider turning their homes into an annuity by using one of the least tapped avenues of a reverse mortgage.
These monthly payments are available under a feature of the loans called tenure payments. The payments allow borrowers to convert a percentage of their home’s value into monthly payments for the time, or tenure, they remain in their homes, supplementing other retirement assets.
Most reverse mortgage borrowers now seek a one-time, lump-sum payout. Often, those funds evaporate sooner than expected.
While tenure payments are not widely discussed among existing lenders, they are the centerpiece of a new reverse-mortgage philosophy. For example, Bellevue-based Axia Financial believes tenure payments can be an extremely viable and attractive way for millions of seniors to at least partially close their retirement income gaps.