With Rebound of Lakeland Fl Homes For Sale, Home Equity Can Be Part Of Your Retirement Plan

August 15th, 2013 12:11

With Rebound of Lakeland Fl Homes, Home Equity Can Be Part Of Your Retirement Plan With Rebound of Lakeland Fl Homes For Sale, Home Equity Can Be Part Of Your Retirement Plan Your equity in your home may be a great source of income for building your retirement. With prices of homes in Lakeland FL rebounding, many homeowners may once again call their home as their most valuable investment. However, when calculating retirement income, home equity is generally not taken into consideration, but doesn’t it make sense to include home equity in planning for sources of retirement income? In some cases, it does but others may encounter problems in assuming that home equity can be a source of retirement income. In order for a homeowner to access home equity, you have to find a way to obtain it, and that usually means either borrowing it or cashing it out by putting your Lakeland Fl home for sale. Borrowing home equity is expensive and very complicated since your property is not a liquid investment. You can get a HELOC then use the funds as necessary, but it may cost you since you will need to pay off the loan or you will have to pay a monthly interest on the borrowed amount, which kind of defeats the purpose. One option for getting your home equity is through a reverse mortgage, which comes at a high cost like loan origination fees, mortgage insurance premiums, and closing costs. On top of that, you still have the ongoing monthly interests rates and fees to pay. The upfront fees can be expensive. For a standard HECM (Home Equity Conversion Mortgage), the mortgage insurance premium is 2% of the full value of the Lakeland Fl home and not the loan amount. There is a cheaper alternative which is the HECM Saver Loan, which has a lower mortgage insurance premium of 0.01% but the catch is the interest rates are higher. These options are generally seen as “back up” plans to access home equity when all other means are exhausted. Selling your Lakeland Fl home will be the better option to get access to your home equity to use for retirement income. Many future retirees would have been hesitant to put their Lakeland FL Homes for Sale during the economic downturn, and even if their homes’ values did not depreciate or could sell their homes at a higher price, there just wasn’t enough buyers in the market. Either they could not sell their Lakeland Fl home to buy a new one o they couldn’t qualify with the tightened credit policies. A retiree just could not count on being able to sell their Lakeland Fl home and access the equity for their retirement income. But there are times when tapping into home equity as a source of retirement income may be a good plan. The IRS gives homeowners an incentive of up to $250,000 in tax-free gain for individual filers and $500,000 for couples who file jointly. In order to receive this tax-free gift, you must have lived in your Lakeland fl home for 2 of the previous 5 years before you sell it and have some home equity. Of course you will have to put your Lakeland Fl home for sale, but it may be worth it. I haven’t seen an investment where you get a tax break along the way through the tax-deductible mortgage interest and property taxes and then receive a tax-free benefit as well in the end. If the homeowner is unable to sell their Lakeland Fl home right away, they can always rent out the home for a couple of years until a sale is feasible. They could still get the tax-free benefit as long as the ownership and use test are met. Although selling a Lakeland Fl home with a tenant living in it would be less than ideal, but the benefit could far outweigh the hassle for most people. Your Lakeland Fl home could be not just a place to live, but an investment for your future as well. Keep in mind the home value’s potential appreciation as a future strategy to downsize and buy a smaller home, or to sell the Lakeland Fl home and invest the tax-free gain. Although there is no guarantee if home prices will continue to go up and you may not be able to sell your home at the time you want, but if you are able to use this strategy, it will greatly boost your retirement income. Be sure to check with your Certified Public Accountant (CPA) and your attorney before deciding on any of the aforementioned tips above. Authored by Petra Norris


Lakeland Florida short sale services and agents are dedicated to help Lakeland homeowners in distress to do a short sale on their home and avoid foreclosure. Read More

Featured Posts

Common Mistakes That Could Decrease the Value of Your Lakeland Fl Home For Sale

Lakeland FL Sandpiper Homes – July and August 2013 Real Estate Market

The Role of a Listing Agent in Your Lakeland Fl Home For Sale

Tips in Buying Lakeland FL Sandpiper Golf Front Homes For Sale

Why a Lakeland FL Home For Sale By Owner is a Bad Idea

Sandpiper Golf and Country Club Real Estate Market | January – June 2013

With Rebound of Lakeland Fl Homes For Sale, Home Equity Can Be Part Of Your Retirement Plan

4 Things To Do When Your Lakeland Fl Home Is Not Selling

When Is The Best Time To Sell Your Lakeland Fl Home?

Bank of America Offers Incentives For Lakeland Fl Short Sales

How To Sell Your Lakeland Fl Home If You Have Pets

Questions You Should Ask Before Buying a Lakeland Fl Home For Sale (Part 3)

Why You Should NOT Tell Your Buyer’s Agent Your Highest Price For A Lakeland Fl Home For Sale

How A Lockbox Could Benefit Both Buyer and Seller of A Lakeland Fl Home for Sale

How to Cope With Stress When Buying A Lakeland Fl Home

Testimonials For Petra Norris - Lakeland FL Broker REALTOR

Is a 30-Year Mortgage for You When Buying Your Lakeland Fl Home?

How To Keep Your Privacy During a Lakeland Fl Home Showing

5 Ways To Prepare Your Lakeland Fl Home For An Open House

Lakeland FL Mayfaire By-The-Lake 2013 - A Mother's Day Treat!

Tag Cloud

mortgage home selling tips Lakeland Fl short sale agents Lakeland Fl short sales short sale services Lakeland FL Polk County Short Sales Short sales Investing lakeland florida living in lakeland fl relocating to lakeland fl local events things to do things to do in lakeland fl localism lakeland fl bicycle friendly bikelakeland buying a lakeland fl homes closing selling a lakeland fl home market shift lakeland fl market shift lakeland fl short sale agents • lakeland fl short sale specialists • Lakeland Fl short sales buying a lakeland fl home first time home buyers lakeland fl home buying credit home buying mayfairebythelake free entertainment arts entertainment Lakeland Fl homes for sale open house tips and advice privacy lakeland fl home selling mortgage payments testimonials petra norris lakeland fl real estate agent home buying tip lockbox lakeland florida homes for sale Lakeland Fl real estate broker lakeland florida real estate Lakeland FL Home for Sale Bank of America selling lakeland fl home selling lakeland fl homes retire retirement Sandpiper Golf and Country Club homes for sale Sandpiper Golf and Country Club real estate market for sale by owner Sandpiper Sandpiper Golf Homes sandpiper golf homes for sale listing agent Selling your Lakeland FL Home lakeland fl sandpiper golf and country club Real Estate Market Statistics lakeland fl home selling tips