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Learn the pros and cons on reverse mortgages.
 

KEY QUESTIONS TO ASK ABOUT REVERSE MORTGAGES

 

If you are a homeowner who is 62 years of age or older, you might find that a reverse mortgage would provide extra cash to you each month and be a better option than a home equity loan.

 

Many older adults are using reverse mortgages to handle unexpected or increased expenses. The reverse mortgage can provide income, a credit line, or a lump sum payment.

 

  

 

 

 

 

 

 

UNDERSTANDING REVERSE HOME MORTGAGES

 

But before jumping into reverse mortgage, you need to proceed with caution or you could end up in the position of not being able to repay the loan. Reverse mortgages after all are a means to spend out the equity of your home but in the end, these plans are loans and must be re-paid.

 

Homeowners considering a reverse mortgage should seek the advice of a good financial planner and look at all options before signing the dotted line on any agreement which might put them into financial jeopardy.

 

Some good questions to ask include:

  • Why am I in need of this money and how much can I borrow?

  • Is there any other option than a reverse mortgage?

  • Will the reverse mortgage change my financial status thereby making me ineligible for financial aid or benefit programs?

  • Will a reverse mortgage help me meet a short-term gap or do I really need a better long-term financial plan?

  • What are the fees, interest rates, out-of-pocket expenses or penalties surrounding the loan or payment terms?

  • Would it be better to sell or move rather than to use a reverse mortgage?

  • What happens if I become ill and require admission to an assisted living or skilled nursing care facility?

The high cost of prescription drugs combined with drops in pension plans and stocks are forcing many older adults to come up with new avenues of financing their expenses. A reverse mortgage might be a good solution to helping you to stem the tide but a complete analysis is needed to ensure you’ll sail safely through your retirement years.

 

 

 

 

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