1. With Rebound of Lakeland Fl Homes For
Sale, Home Equity Can Be Part Of Your
Retirement Plan
Authored by: Petra Norris

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

3. 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 thefull 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.

4. 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.

5. 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.

6. 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.

7. Petra Norris Realtor®
Lakeland FL Homes for Sale
CDV TransAtlantic, Inc.
PO Box 92050, Lakeland, FL, 33804-2050
Office Phone: (863) 619-6918
Cell Phone: (863) 712-4207