Wednesday, August 8, 2012

Reverse Mortgage Myths

Last month the National Council on Aging released their top 8 myths about reverse mortgages.  Many of the myths are easy to guess, but there are a few of them that I want to spend a couple blog posts discussing.  The first one is myth #4, "Reverse mortgages should only be used as a last resort".

One of the things I hear people say who I know could really use the reverse mortgage but just can't get off the fence is "We're not to that point yet".  What I always ask is, "what point do you mean".  It seems that many people think the reverse mortgage is only something for the destitute, or those without another choice available to fix some sort of personal financial meltdown.  This however is not the case!  I have done many reverse mortgage loans for people with paid off homes and large monthly incomes who just want to be in control of their biggest asset, not the market!  Besides, to quote the NCOA article; "If you wait until you are in a financial crisis, a little extra income each month probably won’t help. Reverse mortgages are best used as part of  a sound financial plan, not as a crisis management tool."

So take a good look at your situation.  Are you on a fixed income?  Do you or your family have a history of health problems?  Do you have an adjustable rate mortgage?  You may be okay now, but what about when the price of gas goes up another fifty cents or even a dollar a gallon?  What will you do if the interest rate on your mortgage goes up 1/2 a point and your monthly payment increases by $100?  Now is the time to prepare for any what-if's that may be coming in the future.

Along with a reverse mortgage there are many other programs and benefits that you can qualify for to help with day to day needs.  This can be help with anything from property taxes, food and medications, to home energy.  You can visit http://www.benefitscheckup.org/ to find out more.

Tomorrows blog post will discuss another myth mentioned in the NCOA's article.  Stay tunes to see if the fixed rate reverse mortgage is always the best way to go...

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