Should someone get a Reverse Mortgage in order to stay in there house as an alternative to selling the home, moving to assisted living, or dedicated skilled care? The easy answer is “maybe” and depends on the circumstances associated with their individual financial situation. The reverse mortgage allows the senior to stay in the home for the remainder of their life assuming the continue to live in and maintain the property and pay the property taxes and homeowners insurance. Any existing mortgage is paid off and subsequently frees up that cash flow for the senior that used to be paying a mortgage payment each month. Sound too good to be true? What’s the catch? The costs of a Reverse Mortgage are approximately 6% of the value of the home, the equivalent of using a traditional real estate broker to sell the home.
The AARP statement reflects that if a senior considers living in the home 5 or more years, a Reverse Mortgage maybe a good alternative. Statistics show that seniors have a greater satisfaction staying in their home rather than having to leave for any type of reason. As the benefits of aging in place continue to be examined, Reverse Mortgages will continue to gain traction regardless of the fees and lending limits.
For more information on an article on Fees and Lending Limits preventing seniors from taking a Reverse Mortgage, click here.