REVERSE MORTGAGES AND CIRCUMSTANCES THAT MAKE IT A GOOD FIT
Through a 3rd party, I learned that a homeowner was trying to sell but was unable, at this time, to sell it for the amount she needed to make in order to move on. She is presently considering a reverse mortgage. The first question I would ask her is "What was your original motivation for moving?"
Because first and foremost, to consider a reverse mortgage, there needs to be a good reason to stay in the home. Is it the perfect size? the perfect neighborhood? Will it allow you the quality of life you're looking for in your advanced years? Is the home maintenance and related costs within reach? Are the property taxes reasonable?
If any of the answers to the above questions is "no," then a reverse mortgage is not for you and your initial decision to move may be the more well-thought out of the two choices.
Reverse mortgages can still be costly: loan origination fees, appraisial, mortgage insurance premiums, and typical closing costs like title search and a survey, but, even worse, they can just be wrong for a person's needs and keep them chained to a situation that is best altered.
If the reverse mortgage option is the one for you, understand that it can be a good way for those 62 and over to access their home's equity. You can receive a lump sum, monthly payments or a line of credit. Payback is not due until the home is sold, or the homeowner moves or dies.
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ABOUT THE AUTHOR: Graduate REALTOR Institute
Jill Sackler, NYS Real Estate Broker Associate based on Long Island's South Shore
Specializing in Lifecycle Real Estate Transitions
©Jill Sackler 2010