Real Estate Solutions

Pam Silverman

Using Your Equity
What To Do With It? When To Utilize it? How To Get It Out?          

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For most seniors that own their own home (even if you are still making mortgage payments), there is a lot of wealth tied up in your home. The big questions are:

  • What to do with it?
  • When to utilize it?
  • How to get it out?

Answering the question "What to do with it?" is the most important as it will lead to the answers for the other two. Too many seniors simply believe that it is their inheritance for their children and grand-children. The equity in your home can be so much more. Many seniors place a financial burden on other members of the family by requiring family contributions for their care and support while preserving the inheritance for a later day.

The equity in your home may be available today for such uses as?

  • Providing funds to maintain your desired lifestyle.
  • Providing security for long term care.
  • Eliminating your current mortgage payment.
  • Providing a down payment so that your children can buy a home.
  • Providing an inheritance to family members in advance to overcome current financial situations.
  • Taking the vacation you always promised yourself you would take.
  • Providing funds for necessary home repairs.
  • Providing funds to be able to purchase a smaller home, or one closer to family, without a mortgage payment.
  • Providing a source of additional income.

"When to utilize it?" depends on how you answered the first question. It also depends on your total financial situation. Looking at today is important. Looking at tomorrow is just as important. If you or your family need funds now for critical needs, now is probably the best time as long as you factor in your future needs as well.

If you are looking to provide funds for family members to better their life before you pass on, finding the right time that will benefit the family member the most will require frank talk at family councils or one-on-one discussions. These discussions might also involve your tax accountant and/or your family attorney.

If this source of funds is the answer to your long term care there may be ways to increase the funds available through smart conservative investments or to secure guaranteed care. Be sure to include your accountant and insurance broker in these discussions.

If another home for you or your family is in the cards, I will be glad to sit down with you and discuss all your options.

"How to get it out?" is the 64 dollar question. There are many ways available to you. Some will work for your particular situation, some will not. Some of the ways to access some or all of your home equity include:

  • Refinancing
  • Putting an additional loan on your home
  • Obtaining a home equity loan
  • Selling your home
  • Utilizing a reverse mortgage

Some of these methods will require the establishment of additional debt. Some will not. Some will require the ability to quality. Some will not. Some might include ways of utilizing part of the funds obtained to pay the debt. Some will not. One or more of these methods may be right for you. One or more may not. Before making any decisions or taking any action that might place a financial burden on you that is not in your best interest, be sure to seek qualified council that you trust. Actions that may seem to be in the best interest of one or more family members may not be in your long term best interest.

I will be glad to sit down with you to discuss any option that may include the sale or purchase of real estate. If you need referrals of an accountant, attorney, insurance or mortgage broker that will have your best interest at heart and are "senior friendly" please give me a call at 805-320-1405.

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