Is A Reverse Mortgage Right For You?
A reverse mortgage has been very beneficial for literally hundreds or thousands of seniors across the USA. Some of the more common uses of a reverse mortgage can be segregated into a few categories, relieving financial stress, improving living conditions, addressing medical needs, estate and/or long term care planning and assisting other family members. Noted below are some of the more common uses of the funds provided by a reverse mortgage.
Relieving Financial Stress
- Pay off existing mortgage
- Pay off Credit Cards & Other Debts
- Increase monthly revenue
Improving Living Conditions
- Allowing for home repairs
- Modifications for limited mobility
- Additions for family are givers
Addressing Medical Needs
- Hospital and surgical needs
- Support cost of prescription drugs
- Distributing Assets to avoid estate taxes
Estate and/or Long Term Care Planning
- Allow for professional and/or family care givers
- Purchase of Long Term Care insurance
Assisting Other Family Members
- Grandchildren’s college tuitions
- Helping with purchase of new home
- Assisting with unexpected medical expenses
However, there are also certain situations where a reverse mortgage may provide some immediate relief, but at a cost that may make the use of a reverse mortgage inappropriate. That’s not to say that a reverse mortgage should never be used in these situations as each individual set of circumstances are different, but careful consideration of all of your options should be explored in these situations.
Planning on selling the home in a couple of years
The cost of a reverse mortgage typically becomes more attractive when amortized over an extended period of time. Even though the majority of the initial costs are financed as part of the reverse mortgage, the initial cost of settlement can make other available options more financially attractive. Thus most professionals in the reverse mortgage field agree that a reverse mortgage is typically not appropriate if you plan to sell your home in fewer than two or three years.