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Reverse Mortgage Upsides and Downsides

As you inch closer to retirement, you may have some excitement, but you may also have some worries. In particular, you might be concerned about how retirement can impact your financial situation. After all, the loss of your weekly paycheck can be daunting, even if you think you are prepared for it. Whether you know you need financial help during retirement or just want to prepare in case of an emergency, a reverse mortgage for retirees is designed to help. However, it does have upsides and downsides, as outlined below.

Old lady on a swing - reverse mortgage
Image by Claudia Peters from Pixabay

Upside: A Reverse Mortgage Can Replace Some Lost Income

A traditional home loan is not designed to replace the money you earned working each week. It typically pays out only once. However, you can set up a reverse mortgage to dole out funds to you month after month. Having that predictable monthly payment is almost like replacing your lost ongoing income you made when working, at least temporarily.

Downside: It Does Not Last Forever

One of the downsides of setting up a reverse mortgage to pay you monthly is those payments do not continue indefinitely. Among the possible downsides of reverse mortgages is the fact you can only borrow up to the total available amount. Therefore, one day you will stop receiving those checks. You must plan ahead for that eventuality to make sure you will stay financially stable after those payments stop.

Upside: Your Loan Period is Longer with a Reverse Mortgage

A loan period is simply how long you have to pay back a loan. A traditional home mortgage often has a loan period of five years or less. A reverse mortgage has an indefinite loan period. That period is defined primarily by how long you remain in the home. The agreement requires you to use it as your primary residence. If you stop doing so, the balance is owed. Therefore, your reverse mortgage period can be much longer and allow you more years of retirement comfort.

Downside: A Longer Loan Period Means More Interest

As you probably know, most loans require payment of interest. A home loan is no exception. Both traditional and reverse mortgages require you to pay interest. The difference is a reverse mortgage lasts much longer. Therefore, there is much more interest to eventually pay.

Upside: You Mostly Choose How to Spend Reverse Mortgage Money

Old couple sitting on a bench, looking out to sea
Image by lecreusois from Pixabay

Another upside of a reverse mortgage is there is very little restriction regarding how you can spend the funds. You can use them for necessary purposes like paying for medical care. However, you can also opt to use them to go on trips or otherwise make your retirement more fun. The choice is entirely yours.

Downside: There Are Initial Fees to Deal With

The amount of money you can potentially borrow with a reverse mortgage is affected by certain upfront processing fees. Those fees are deducted before funds are issued to you, typically. If you happen to already have an active traditional home loan, you are also obligated to immediately pay its balance with some of the reverse mortgage funds. Therefore, the total you actually receive free and clear may not be what you first expect to receive.

Big Picture: You Have to Consider Your Priorities

As you can see, arguments can be made both for and against reverse mortgages. Base your own decision on your personal priorities. For example, if you intend to move in the near future, a reverse mortgage is not right for you. However, if you have no plans to move and want to supplement your income with no immediate financial strain, it could be the perfect answer.

This is a collaborative post

Ways To Improve Your Credit Score

person holding a credit card - credit score
Image by Michal Jarmoluk from Pixabay

In today’s world, your credit score is quite important. Not only will your credit score determine whether you can get a mortgage or other bank loan, it will also be checked when you want to sign up for a mobile contract, pay your car insurance in monthly instalments or open a new bank account.

What Is A Credit Score

Your credit score is used by lenders to help them decide whether to issue you with a loan based on your credit history.
If you always pay your bills on time and haven’t been in arrears you will have a good credit score.
However, if you’ve fallen behind with any bills, had your credit accounts sold to debt collectors because you’ve failed to keep up with agreed payments etc, your credit history will be poor.

Get A Credit Rebuild Card

Using a credit card to rebuild your credit is a good way of improving your score. However, it’s a vicious circle because it can be difficult to get a credit card if you have a poor credit history.
There are card companies out there that provide credit to people with a poor score and as long as you use it for small amounts each month then pay the bill in full, it will look good on your credit report.

You can also do the same by looking into smaller loan amounts and making sure you pay them off in full and on time.

Register To Vote

One of the easiest ways to help improve your score doesn’t have anything to do with your payment history, it’s simply to be included on the electoral register.
Being registered to vote means lenders can verify your address and they like to know you have a permanent address.

Another way to improve your score is to pay all your bills on time and never default on payments.
Defaults in the last 12 months will hurt your score more than some from a few years ago.
Reducing all your debt will go a long in helping your score improve.

Building A Good Score Takes Time

Building a good credit score won’t happen overnight. It takes time and planning, especially if your current score is low.
Limiting credit applications, only borrowing what you can afford and making sure all payments are made on time will help the process but you’ll need to be patient.

This is a collaborative post.


Helpful Tips For Setting Up An Office

Image by Malachi Witt from Pixabay

Setting up brand new office space from scratch can be pretty daunting. It doesn’t have to be, however; if you plan ahead and do your research, you may even find yourself enjoying the experience.

Below are some things to think about when setting up your new office.

Make Lists

Lists are your friends! They can help to keep you focused when things start to get overwhelming.
You’re going to need different lists for the different areas of the office. Here are some ideas to get you started:

  • Legal Constraints & Obligations
  • Communications & I.T.
  • Furnishings
  • Stationery & Office Supplies
  • Security Systems

Let’s look at these in more detail.

Legal Constraints & Obligations

If you’re leasing your office space, you need to be aware of any constraints there may be, especially if you’re wanting to make any alterations.

You also need to ensure the office observes health and safety laws as well as complying with the Equality Act to make sure people with disabilities can access the space.

Communications & I.T.

Phone lines, broadband and internet access points are the main areas of communication you’ll need to organise.
You’ll then need to decide how many computers and printers you’ll need and decide whether you’re going to have your own servers and network.

Office Furniture

There are many different styles of office furniture out there so you’re going to need to visualise the space and decide how you want the space to look.

Desks, chairs and office storage for your employees are the first items that come to mind but you may also need larger conference or training tables and comfy seating for visitors.

Stationery & Office Supplies

Stationery is not just paper and pens, you’re going to need to think about letterhead paper, complimentary slips and business cards amongst other things.
You can design your own company logo for your letterhead and business cards, pick from hundreds of different designs online or have it designed specifically for your business by a design firm.

Security Systems

Do your research before buying and installing a security system. There are many different types and levels of security available to suit all budgets.
Don’t go with the first firm you find, get quotes and check reviews before parting with your money.

This is a collaborative post

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