A reverse mortgage may be the right option for some seniors but needs careful consideration before being accepted.
The government stepped in after the financial crisis of 2008 and addressed some of the concerns about reverse mortgages including seniors losing their homes. While the acceptance of reverse mortgage has now improved, many elder law advocates urge seniors to approach the option carefully as Consumer Reports discusses in "Reforms Come to Reverse Mortgages."
These considerations include:
- If you are not planning on staying in your home for very long, then a reverse mortgage is probably not a good idea. The fees associated with the mortgages make them less desirable the shorter amount of time that you will stay in the home.
- If you can meet your financial needs in a different way, then consider doing so. For instance, instead of getting a reverse mortgage it might be a better idea to downsize into a cheaper or smaller home.
- Consider whether your home will still be appropriate as you get older. Houses with lots of stairs may not be the best place for many seniors.
- If a spouse passes away, consider whether the surviving spouse will be able to afford to keep the home and pay the bills on time.
An elder law attorney could be helpful in discussing your options.