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    Tap Home Equity for Extra Income

    by Rivan V. Stinson Mar 25, 2021 6 minutes

    Housing wealth, better known as home equity, increased to $7.8 trillion for homeowners 62 and older in the third quarter of 2020, according to a report from the National Reverse Mortgage Lenders Association. That’s good news for retirees who are concerned about running out of money in retirement—as well as those who aren’t—because your home could provide the key to long-term security.

    There are more ways than ever to turn your equity into a source of retirement income. Outside of a plain-vanilla refinance, retirees can access their home equity through a cash-out refinance, a  home equity line of credit or a reverse mortgage. Or you can downsize (more on that below) and use the proceeds to beef up your nest egg. Read on to help determine the best option for you.

    Refinance your mortgage

    For many retirees, refinancing is the best option if you need to make your money work harder for you. It’s easy to do, and although rates have been inching higher, they are still at historic lows—about 3% for a 30-year fixed-rate mortgage. (Kiplinger forecasts rates to be 3.5% by the

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