USING HOUSING WEALTH TO HEAT A HOME
Now that you’re both retired, you’ve begun the process of adapting your home inside and out to better suit your future “aging in place” needs and in general to improve the décor and the front and back yards. Your appliances, HVAC system have all be updated or replaced, You have already installed a charging station for the electric vehicles you purchased. Importantly, all these things have been paid for without any new borrowing or reducing reduce your regular withdrawal plan out of your investment portfolios and IRAs.
For the past couple of years you have served on the board of your Homeowners’ Association, and one of the neighbors was able to obtain a sufficient number of signatures to petition our board to install solar panels on his home. As a board, you’d invited your HOA attorney to speak. In the course of learning about the cost-saving advantages of going solar, the two of you have become interested in doing that on your own home. You definitely like the idea of reducing costs and tax credits, because, like everyone else you know, the electric bills have moved in only one direction – up. You’ve gotten some tentative quotes on pricing, and it’s obvious this big a project would shake up your finances.
How best to finance the “conversion” to solar is your financial management dilemma now – would a payment plan be a better course of action rather than a mortgage on the home itself?
You might consider a reverse mortgage, using the equity you’ve built up in the home to finance the solar panel installation. That way, you’ll be able to take advantage of government and state incentives without the additional costs of an installment plan — and you’ll avoid monthly mortgage payments.* Whatever portion of your housing wealth is not needed for the solar project will grow at the same rate as the interest being charged on the reverse mortgage loan. Until such time as you sell the home, move, or die, neither you nor your heirs will be liable for any part of the loan that exceeds the value of the home.
While you’ll be “helping the Earth” by promoting sustainable energy and fighting climate change, you’ll be effecting a positive long-term change in your own financial picture.
https://mutualreverse.com/david-garrison
*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.
David Garrison, NMLS ID 1595194. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Indiana-DFI Mortgage Lending License 43321. Michigan 1st Mortgage Broker/Lender/Servicer Registrant FR0022702. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: www.nmlsconsumeraccess.org
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