Are you and your spouse starting to move into your retirement years? If so, you already know that you are going to need a solid financial plan in the event your cash flow is challenged. If you have invested in your retirement, you might be all set. However, what if your house makes up most of your net worth?
Reason #1: This Is Your Last Home
To qualify for a reverse mortgage, you must be on title to your home and occupy it as your primary residence. If there is a mortgage balance it will have to be paid off through the refinance of a reverse mortgage. A reverse mortgage is a loan, secured by your home, it converts a portion of the equity, and repayment is deferred to a later date. It is a refinance. If staying in this house is your long-term plan, then a reverse mortgage might be a good fit.
Note: You can sell your home when you have a reverse mortgage. You simply must pay the outstanding reverse mortgage balance typically through the sale of the house. If you want to buy a second or investment home, you will need to financially qualify to carry both homes while always occupying your primary residence.
Reason #2: Leaving a legacy is not your primary motive.
You may or may not have children. You have done your financial planning and have analyzed your needs, you want to stay in this house long term, and this fact is more important to you than leaving it, debt-free, to your children.
Reason #3: You can afford property taxes, homeowners insurance, other property charges and maintenance.
Finally, don’t forget that with a reverse mortgage, you are still responsible for property taxes, homeowners insurance, other applicable property charges such as HOA dues and maintenance costs. Falling behind on these items can cause your reverse mortgage loan to become due and payable. If you can afford these costs long-term then the reverse mortgage can be a viable option.
To learn more about reverse mortgages, contact your local certified Reverse Mortgage Professional (CRMP) for guidance and expertise.