Many financial analysts have pointed out that the major resource of older homeowners is their home equity. Traditionally, people with fixed incomes were advised to put their equity to work by selling their homes and investing the proceeds. Recently, some innovative ideas for unlocking this source of money without giving up your home have been tried out experimentally in a few localities. These plans are known in the field as home-equity conversion (HEC) plans.
Three different types of HEC plans have evolved from the fundamental idea that equity, converted into cash, can boost buying power and improve quality of life for many older people. The three variations are: reverse mortgage plans, sale-leaseback plans, and special deferred payment loans to upgrade or modify homes.
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