Besides reverse mortage, what options are available if I am without heir and want to get cash in retirement backed by my equity?

Edit: I live in Canada, 40 years old and I am building savings by filling out my RRSP limit yearly.

  • Have you ruled out getting a conventional (cash out) mortgage? – Phil Sandler May 16 '14 at 16:52
  • You mean taking out a mortgage knowing I won't be able to pay it back? That's mean :P and I am just at the planning stage now, I am barely 40 yrs old. – chx May 16 '14 at 17:44
  • Maybe that "I am barely 40 years old" should have been included in the main question instead of being an add-on comment. – Dilip Sarwate May 16 '14 at 19:49
  • Depends what country you're in, which you might want to add to your question. – Mike Scott May 16 '14 at 20:10
  • What age do you plan to retire at? If you have 20 to 30 years before retirement maybe start putting some savings away and invest it so that you can have a nest egg to retire on instead of your equity ! – Victor May 16 '14 at 21:12

There's no free lunch. When people talk about 'equity tied up in their house,' it's not like money can be in two places at the same time. You either own a paid-in-full house or you have loans against it.

The reverse mortgage is, in effect, a loan. It accumulates interest on some portion of your home's value and if you live long enough, you'll be in a home that has no equity at all.

At some point, you might consider a sale with lease back. To be clear, this would be an outright sale, but to someone willing to rent the house back to you. At least you'd have the funds, no interest accruing on a loan, and, with proper legal advice, the right to stay in the house. The buyer gets a built-in tenant, and the potential increase in value over the years till you pass. The rent might have capped increases as part of the deal.

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    > you might consider a sale with lease back This is exactly what I was looking for, thanks! – chx May 16 '14 at 23:36

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