The Top 5 Reasons to Get a Reverse Mortgage

A reverse mortgage - or Home Equity Conversion Mortgage (HECM) - is a type of loan that allows those 62 years of age or older to leverage the equity in their home in the form of a loan.  If you see yourself staying in your home for the foreseeable future, live there as your primary residence, and can stay up to date on homeowners insurance and property taxes, you’ve met the main qualifications for this type of loan.  

So when would a reverse mortgage be a good idea?  Here is a short list of my top 5 reasons to get a reverse mortgage:

• Pay off existing debt or large outstanding expenses  

A reverse mortgage needs to be the “first lien” on your home.  So if you have an existing “forward” mortgage, you’d need to use part of the reverse mortgage proceeds to pay that off.  However, the reverse mortgage proceeds can be used for much more than paying off a traditional “forward” mortgage.  

Borrowers can use the money from a reverse mortgage to pay for things like medical expenses, car payments, home renovations, or even outstanding credit card debt. 

2.   Retirement experiences

Reverse mortgage proceeds can be used to pay for things that you want, not just things that you need.  Many folks spend their working lives dreaming of the things they will do and places they will see once they don’t have to clock in at work everyday.  A reverse mortgage can finance those trips and experiences if you want it to :)

3. Plan for future expenses

A reverse mortgage has several payout options, including a lump sum, fixed payments over time, a line of credit, or a combination of those three.  If you anticipate future needs - like long term in-home care or home renovations - a reverse mortgage can also be a way to pay for these when needed.

4. New home purchase

Even though part of the requirements for a reverse mortgage involve making the home your primary residence, it is possible to take out a reverse mortgage on a new home purchase.  

This means that if downsizing or moving to a different community is part of the plan, a reverse mortgage is still an option.  

5. Peace of mind

Planning for retirement can be tricky.  It can be difficult to save over time given life’s demands, and transitioning to a fixed income may cause anxiety for some.  

A reverse mortgage can help by giving borrowers a little breathing room when it comes to money.  

The simple change of going from making a mortgage payment to receiving a reverse loan payment can be all that’s needed to achieve this. 

If you think a reverse mortgage might be right for you, please give the team at Equity Access Group a call.  They are reverse mortgage experts and can give you the answers you need to make your decision.