By Alain Valles
The Oxford Dictionary defines “attribute” as a “quality or feature regarded as a characteristic or inherent part of someone or something.” Attributes are rarely all good or all bad but depend on how the attribute is used. This specifically applies to reverse mortgages.
Below is a list of reverse mortgage uses that have been attributed to maintaining or improving the quality of life for older homeowners:
- Increase monthly cash flow
- Pay off current mortgage
- Pay off current home equity line of credit (HELOC)
- Pay off high interest rate credit cards
- Cash reserves for unforeseen emergency life events and peace of mind
- A reverse mortgage line of credit that grows over time
- Option to receive monthly funds for life*
- No monthly mortgage payments are required*
- Complete needed home repairs
- Undertake dream home remodeling project
- Supplement Social Security payments
- Replace lost income from no longer working
- Make home accessible (stair chair lift, ramp, safety features)
- Replace lost income from death of a spouse
- Financial solution to a divorce
- Fund an active travel lifestyle
- Buy a new home with a reverse mortgage
- Funds to get current home ready to sell (septic system for example)
- Afford at-home care instead of a nursing facility
- Afford a nursing facility if a spouse is unable to live at home
- Continue to pay existing life or long-term care insurance
- Pay for Medicare parts B & D
- Money to pay off legal or IRS matters
- Funds to pay real estate taxes and property insurance
- Pay off car loan or purchase a car
- Augment current retirement portfolio plans
- Strengthen existing estate plan
- Reverse mortgage funds are tax-free
- Reverse mortgages are a non-recourse loan. You do not sign personally.
- Option to gift money to children, for example, assist with their down payment on a home or help fund college tuitions.
- Most importantly, having choice and options to fund the next chapters of your life.
(*Note: reverse mortgages have a cost. Borrowers are responsible for real estate taxes, property insurance, and meeting other ongoing loan requirements. The above is for discussion purposes only.)
Reverse mortgages have helped hundreds of thousands of older homeowners enjoy a financially independent lifestyle while being able to enjoy their homes. However, there have been instances where a reverse mortgage was not the best solution and in fact caused pain. An “attribute” may help one person but harm another. The key is to obtain the factual information about the mechanics, the cost, the benefits and the risks about reverse mortgages. Too many people rely on late night infomercials, marketing materials, or good-intentioned opinions from friends who don’t have the full story.
Get the facts from an independent source! Contact me to receive the only federally approved consumer booklet, “Use Your Home to Stay at Home,” that is published by the National Council on Aging. This is an excellent place to start. Call or email me and I’ll forward a copy free of change.
My philosophy is “reverse mortgages are not for everyone, but everyone should know about them.” I look forward to speaking with you.
Alain Valles (CRMP, MBA, CSA, and president of Direct Finance Corp.) was the first designated Certified Reverse Mortgage Professional in New England. He can be reached at 781- 724-6221 or by email at [email protected].