Reverse mortgages have been marketed toward elderly homeowners, as a way to use. But how exactly does it work and is it a good idea?
While a reverse mortgage will provide additional income without resulting in monthly mortgage payments, there are situations where taking one out is not necessarily a good idea. Financial Situation It is generally not a good idea take out a reverse mortgage if the homeowners are on solid financial footing.
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Best Answer: A reverse mortgage works for some people and not for others. It depends on the appraisal value of the house and their age. It depends on the appraisal value of the house and their age..
The idea behind a reverse mortgage is a good one. A senior citizen who owns his house free and clear or who has a small remaining balance on his mortgage .
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A reverse mortgage for purchase may help some seniors finance a new place to live.
A reverse mortgage could be good idea if you’re "house rich but cash poor"-in other words, you own your home outright (or have paid off the bulk of your mortgage), but don’t have much cash-flow If you have a significant amount of home equity, but not a whole lot of ready cash in your bank account, it could make sense to utilize your available resources by tapping into that equity.
"One reason you would want a reverse mortgage is that you’re in need of income or assets that you cannot get from anywhere else." A reverse mortgage is also not a good idea for older homeowners.
If there is doubt about the affordability of the home, downsize to a more affordable home first before considering a reverse mortgage. Experts say the ideal candidate for a reverse mortgage is someone who plans to live in their home until death. They are in good health, in their later 60s or older, and have life expectancies of 15 or more years.
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Is a Reverse Mortgage Right for You? The oldest of the baby boomers began turning 65 on Jan. 1, 2011. On that day and on each day thereafter for the next 19 years, approximately 10,000 people will reach the age of 65, according to the pew research center.As they grow older, this significant segment of the population will face a range of challenges, including the ability to age in place.