A Market That is Finally Warming Up to Reverse Mortgages
While the global pension crisis looms, the Brexit move may not have been a bad decision at all. The UK is seeing a greatly reduced pension deficit of £65 billion, which is a fair amount less than their American counterparts who face a deficit of $3.85 trillion. With that in mind, it’s hard to imagine pensioners making it through their retirement without taking on debt. Here are some of the options available to pensioners who feel the pinch after retirement.
Consumer Loans and Credit Cards
Surprisingly, there are still a number of products open to pensioners who can prove their retirement income and have a good credit record. Although many institutions across the world will insist on insurance to accompany the loan, there are some great products to look forward to such as consumer loans and credit cards. Pensioners are recommended to compare their credit card benefits to ensure they have the best possible option. For once-off purchases, consumer loans may work out a little more cost-effective as the interest rates tend to be lower.
Reverse Mortgage Loans
There was a period where advisers were reluctant to recommend this product to their clients, however, the need for it in the current economic climate is apparent. One of the biggest concerns is that the property is often left as a legacy to future generations and with the reverse mortgage loan, that equity is affected. What is important is that the property works for the owner of it and medical expenses and other massive financial changes take precedence. Without this option, it might put the rest of the family under strain anyway. In the long term, the entire family may benefit from the reverse mortgage scheme.
Home Equity Finance
This option is rarely available to those in retirement, bar those who still enjoy employment. This option allows homeowners to tap into the equity of their property and repay the loan as per a normal repayment agreement. The equity in the property is the difference between the balance outstanding and the value of the property. The term is often a bit shorter due to age, as most financial institutions have a maximum age threshold.
Apart from finance, pensioners also have other options with which to fund their retirement. Rental income from a property, income from a small business, and even going back out to work again may all have a positive effect on a dwindling income.
