Reverse loans have changed over the years, are now a safe option for older adults to use to gain access to their equity, and there are more options to chose from than there were in the past. Initially the only choice was the FHA HECM loan that was a Line-of-Credit, and then a Fixed rate that was also offered by FHA.
Eventually reverse loans outgrew the FHA program and proprietary jumbo reverse loans offered more access to equity for homes valued over $1 MM, and were more affordable in regards to closing costs, but the question is, when should an older homeowner consider using this mortgage?
The questions to ask yourself are:
- Are you planning to remain in your home for at least 5 years?
- Do you have Long-Term-Care insurance if you need medical or caregiving services?
- Do you have deferred maintenance on your home and want to repair or remodel your property?
- Are you concerned about running out of money and not being able to continue to live in your home?
- Are you concerned about leaving an estate to your family or heirs?
- How would your life improve if you had more money and used some of your equity to stay in your home?
All of these questions are something to think about, what applies to you and what are your concerns or worries?
Home values have increased substantially and American seniors now have $11 Trillion dollars in retained equity, and if any of the above questions apply to you, now might be the best time to apply for a reverse mortgage before housing prices decrease.
