While your late wife’s protracted illness forced you to put plans of launching a specialty LLC consulting/coaching practice on hold, you are now ready, at age 69, to get back to the project.. In reanalyzing your finances, you realize that, since you plan to work out of your home office, there will be few “capital expenses”, and that your retirement income is sufficient to cover your normal costs of living.
In order to promote the venture, however, you plan to engage the services of both a public relations firm and a company that creates podcasts, along with those of a business law firm to help with contracts. Ultimately, you are confident you can more than recover these costs. Meanwhile, however, reluctant to draw down your investment account or trigger additional tax liabilities by taking withdrawals out of your SEP-IRA and/or your IRA rollover account, you are planning to apply for a mortgage on your home to the tune of $60,000. That amount should be sufficient to cover the promotional and legal costs for the new business until you’ve established a regular clientele.
Rather than tapping the equity built up in your home through a “forward” mortgage, you might consider a HECM reverse mortgage set up as a line of credit. With no monthly mortgage payments required and no fixed due date for repayment (other than when you leave the home or sell it), there will be much more flexibility, with you drawing only the amounts actually needed. If you are able to generate business more quickly than anticipated, you can stop taking the withdrawals and even begin to replenish the equity. Whatever portion of your equity is not being used will continue to grow, providing a reserve for possible future personal or business needs..
If you’d like to see what you might qualify for with a reverse mortgage in Indiana, or to download your Reverse Mortgage Guide Click Here (and scroll down).
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Borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.