What is better for your retirement? Find out the difference here in our case study.
The Background To The Decision
HomEquity clients Bill and Heather faced this question recently. Bill is in his early 70s, and Heather is in her late 60s. Both are retired and continuing to live in their long-time home.
Bill recently had a stroke and found himself partially immobilized. They talked it over and questioned whether selling their home and moving into a retirement home might be a good option. But they both loved their home and weren’t ready to move on from it yet.
Instead, they put in money to prepare the home so Bill could get around easily – everything from wheelchair ramps, to railings, etc.). It was a large investment, but it gave Bill the mobility he needed and allowed them both to stay in their home. But then the question came as to how to pay for these expenses.
Home Equity Line Of Credit Or Reverse Mortgage?
They considered a Home Equity Line of Credit, but were afraid that their pension may not be able to continue covering the interest and loan payments through the future. This would mean having to sell their home anyways.
So they took out a Reverse Mortgage instead. This allowed Bill and Heather to stay in their home as they wanted, to have access to the money needed to allow Bill the mobility he needed, and the financial freedom they needed to not have to worry about selling their home until they were ready.
Home Equity Lines of Credit and Reverse Mortgages are both viable borrowing options. Before making a decision, it is important to take into account your short-term as well as long-term objectives, and financial outlook. If you want a solution that offers stable and predictable access to your home equity now and in the future, a Reverse Mortgage may be the right choice for you. And with Reverse Mortgage rates being so low, many Canadians are finding them to be a very attractive solution.