Dee Lee, Certified Financial Planner, explains how reverse mortgages are becoming a better financial product causing them to become more popular. There are pros and cons to a reverse mortgage and they are not for everyone, but those people the product is suitable for are staying in their homes and are financially more independent.
A reverse mortgage can provide the cash some seniors need to maintain their lifestyle or make repairs/modifications to their home so they can age in place. There are no restrictions on how the money is used after paying back federal debt and the current mortgage if applicable.
The article writes:
“To be eligible for a reverse mortgage you must be at least 62-years-old and own your home although you can still have a mortgage. But should you be considering a reverse mortgage when you are 62? I don’t think so, unless there some extenuating circumstances.
At 62 and healthy you can look forward to another 30 years in retirement and you have just tied up your largest asset. Before you sign on the dotted line be sure you have talked to a financial planner to see if a reverse mortgage is right for your situation. In addition, HUD now requires extensive counseling and budget planning before they will sign off on the loan.
There is no free lunch here. There are upfront fees. As an alternative you might just consider selling your home, pocketing the profit and moving into a smaller less expensive place or even elder housing or assisted living facility. But moving is a major change and change is hard at any age…”