How Can You Make Your Sandpiper Lakeland FL Homes For Sale A Part of your Retirement Plan?

How Can You Make Your Sandpiper Lakeland FL Homes For Sale A Part of your Retirement Plan?

You can build your retirement using your income from your home equity. As prices of Sandpiper Lakeland FL homes are rebounding, many property owners can once again consider their home as their most valuable asset. Generally, when estimating retirement revenue, home equity is not taken into consideration. But is it not reasonable to include home equity in planning for sources of retirement income? In some cases, it makes sense but others may bump into problems in presuming that their equity in their Sandpiper Lakeland FL home 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 Sandpiper 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 interest 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 Sandpiper 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 Sandpiper 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 Sandpiper 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 Sandpiper Lakeland FL home to buy a new one so they couldn’t qualify with the tightened credit policies. A retiree just could not count on being able to sell their Sandpiper 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 Sandpiper 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 Sandpiper 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 Sandpiper 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 Sandpiper 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 Sandpiper Lakeland FL home could be not just a place to live, but an investment in 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 Sandpiper Lakeland FL home and invest the tax-free gain.

Even though there is no security that price will continue to rise and you may not be able to sell your home at your ideal time, you can still use this strategy to boost your retirement income.

Just make sure to consult a Certified Public Accountant (CPA) and a reliable attorney before deciding on any of the tips mentioned above. To get the best tips on how you can sell your Sandpiper Lakeland FL home for sale, call Petra Norris at (863) 619-6918 today or click here for more information.