Reverse mortgages are sometimes considered an ideal retirement planning tool for many homebuyers. This is because they allow you to borrow against the equity in your home, which then gives you a new source of money or income.
Its main advantage over other types of equity borrowing is that you don’t need to pay anything while you live in the house. You have to repay the loan, however, if you move out or don’t consider the home as your primary residence.
Is it for you?
Reverse mortgage programs are not for everyone, but Primary Residential Mortgage, Inc. shares that they the make sense for those who:
- Have no plans of moving or relocating, or selling the home
- Need to supplement income or have extra money for emergencies
- Need money to make renovations (to make the home safer and more comfortable)
- Want to grow a line of credit
There are also other motivations for getting a reverse mortgage. It may be due to unexpected expenses like a medical situation or an immediate need to pay off debts. You can also use the funds from the loan to pay off the existing mortgage on your property.
It can be beneficial
Over the years, this type of mortgage program has gotten a bad reputation because of the high related costs. There are cases, however, where it could be a key component for your retirement planning and gaining access to extra funds. If you’re cash-strapped and looking for another source of income, this type of mortgage can be beneficial.
Examine your situation
But then again, it is not the right choice for everyone. It is essential to examine your motivation for getting a reverse mortgage to determine if it makes sense for you. Be sure to weigh the pros and cons and think carefully if it would benefit you in the long run.
If you honestly believe that a reverse mortgage makes sense for you, contact a reliable lender or mortgage company. A consultation with a knowledgeable person can also help you make a sound decision.