The first time I ever speak with anyone who’s seeking information about Reverse loans, I always ask them why they are looking into one and how it would improve or change their life.
Most of the common reasons are the following ones:
- Eliminate an existing mortgage and stop having to make mortgage payments each month.
- Increase “cash” flow.
- Home improvements
- Money for unexpected expenses, especially for care-giving and medical bills.
- Avoiding withdrawals on savings and investments.
- Downsizing and buying a new residence.
If the reason to use a reverse loan is for cost of living expenses and increased cash flow, the funds from it can certainly make a difference in the quality of life for a senior, but what is the other option or options?
Sell their home? Or possibly rent out a bedroom or two, to family members or strangers?
Most people don’t want their privacy compromised by having strangers living in their home and having to tolerate someone else’s habits and behaviors that may not be compatible to their way of doing things.
Plus, it can be dangerous or at the least a bad experience.
This leaves the other option of simply selling their home, taking whatever money they net after paying Broker fees, home inspection costs and paying off an existing mortgage.
Hopefully they will net enough money to afford rent payments and continue to live on their own until they run out of their funds from the sale of their home.
Let’s discuss this last option in my next post. Does it make sense? Is it a good idea?
Before anyone can apply for the FHA Reverse loan, they have to complete counseling with a HUD approved counseling agency.
If anyone would like a copy of the list, please contact me and I will send it to you without any obligation on your part.
I haven’t been doing any video in quite some time and today I decided that I would and then post it here. I certainly hope it works just fine.