Like most financial tools, a California Reverse Mortgage is not for everyone. At the end of the day, one may consider a reverse mortgage for several reasons. Typically, it’s to get more money or access more money (or to reduce their monthly liabilities by eliminating their mortgage payment).
That being said, here are some alternatives to doing a Reverse Mortgage (I called them the A, B, C’s):
Assets – Naturally, you can keep doing what you’re doing now and continue to live on the assets you have now (or shall I say, “live on the assets you DON’T have now”). In other words, do nothing. Are you living the life you’ve always wanted? If you are, perhaps a Home Equity Conversion Mortgage (a.k.a.HECM) is not for you.
Borrow – you can borrow the traditional way by qualifying with credit, income, and assets. Things to consider are; 1. Do you want a mortgage payment? 2. If you don’t have enough money coming in now, does borrowing the traditional way really help? Or is it just delaying the inevitable? 3. If you borrow the traditional way, does it potentially eliminate the reverse mortgage as an option? (for example, if you borrow 85% of your appraised value, there’s a good chance you won’t qualify for a reverse mortgage later because will have already borrowed more than you’d get with a reverse mortgage?…..or, would a Reverse Mortgage with NO monthly payment simply work better?
Children – If the family is willing, you can always borrow from them or get them to help out financially. Many have that option and Many do not. What about you?
Downsize – you can always sell your home and downsize (or go live with family). Does moving out of your home seem like the best option for you? Where would you go? How long have you lived where you’re at now? Have you really explored what the move is all about (i.e., the cost, the time involved with moving years of things, will have room for all your things or will you have to get rid of some or get a storage space? Maybe this is the best option for you. Only you can answer that question.
Enter the work force again. Going back to work can help fill a monetary gap. What kind of work would you do? Would you try to reenter your former career? Would you start over? Depending on what kind of work you do, how long can you keep it up? Maybe this is right for you. Many retirees get bored because there so used to working and staying busy.
Equity release or equity sharing is another option. Here is the short version of what this is; Although each company structures these transactions in different ways, the basic premise of the agreement is the same. The homeowner agrees to give up part of a their home’s future appreciation in exchange for cash. The homeowner would typically give up 10% to 15% of their home’s current value. This is also known as a REX Agreement.
…………………or, the remaining alternative of a Reverse Mortgage may be right for you. A reverse mortgage will allow you to:
Find Peace of Mind. The Reverse Mortgage:
- Does not require any monthly mortgage payments
- Allows you to stay in your home for as long as you live
- Is easy to qualify for
- Can help eliminate for alternative borrowing such as a loan with a mandatory payment or borrowing from family or seeking their assistance
- Can eliminate the need to consider going back to work or continuing to work.
No matter how you slice it, not every option is right for every person. If you think a reverse mortgage is right for you OR if you’d like to find out more please email slvReverseMortgage@gmail.com OR shawnv@ReverseMortgageCalifornia.biz
For more in depth info on all Reverse Mortgage subjects, check out