Seniors are living more that they have anticipated. In such cases for retirees who have their own home, reverse mortgage looks a better option to generate some cash. However there are other options also available instead of going for reverse mortgage.
A reverse mortgage also called as lifetime mortgage is a loan available to seniors against their own house, and is used to release the home equity in the property as one lump sum or multiple payments. The repayment of this loan is not required until the mortgage passes away or shifted to another place an aged care home for examples.
As quoted by Thomas Holland, partner at Global Vision Advisors, reverse mortgage loans are only qualified by the seniors who are more than 62 years of age and also owns atleast 65% of the house. The higher the age of the co-owner of the home, higher will the amount of reverse mortgage loan. And once a reverse mortgage is taken out, it increases the person's income, which may have a negative impact on Medicare nursing home payments, Holland says.
Another option suggested by Andy Firoved, chief executive officer of Homeowners Toolbox is to sell the home and move to a smaller place or to an assisted living facility.
A creative solution as suggested by Dan Deighan, founder of Deighan Financial Advisors is to sell your home to your kids. In this way you ensure that the house is with the family after the elders have passed away.
Senior citizens can also look into asking their families for help before getting a reverse mortgage. Bryan Hopkins, president of Hopkins Wealth Management, says He also urges soon-to-be retirees to revisit their retirement plans to explore other options.
Source: http://www.forbes.com/
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