In discussions with a banker, it became clear to me that a reverse mortgage is really a “last resort” for people who need the money to do things like put food on the table and have no other source of income. In most instances a home equity loan makes more financial sense. For those who find that their present home is too much to take care of any longer, selling the home, buying a smaller one, and pocketing the difference for living expenses also makes more sense.
The only other reason to consider a reverse mortgage seriously would be the situation in which an individual or couple has no heirs they want to inherit a home and decide they don’t care if the bank takes possession of their property after they’re gone!
The best advice, however, if you’ve been enticed by Fred Thompson or Henry Winkler to consider a reverse mortgage seriously is to talk to your local banker before calling that “number on the screen.” You’ll get far more personalized advice on what the best decision is for you.
That’s –30—for this week.