Housing market projections and HECM market impacts
It used to be that financial advisors would encourage their clients to pay off their mortgage before retirement. Ah, the day when Mr. & Mrs. Smith can burn their mortgage note. However, fewer older Americans are able to pay off their home before retiring. Consequently, more advisors are suggesting that one should carry a mortgage into and throughout retirement.
“You can’t eat your home”, is a phrase that points to the fact that one’s home equity is useless until one extracts it. For one to extract their equity requires either that they borrow against their home or sell it outright. In other words, their equity is tied up in the bricks and mortar of the home. However, that equity is not necessarily safe. A painful lesson learned by homeowners during the great housing crash of 2008.
