Reasons Why You Shouldn’t Get a Reverse Mortgage…Part 1 of 2
I’ve heard them all.
The point of these posts, however, is to tackle them head-on and demonstrate how they’re either false, or reveal an in-complete truth.
Reverse Mortgage are too expensive.
Are they? Mortgage Insurance Premiums, interest, closing costs and origination fees are all part of regular home mortgages as well. The difference? Reverse mortgages are more upfront about what you’re paying…namely, interests cannot be altered, fees associated with obtaining a reverse mortgage are capped and the borrower has to go to mandatory counseling to ensure everything is disclosed beforehand.
Someone told me it was a bad idea. If a borrower thinking about getting a reverse mortgage is initially confused by the loan, it’s more than likely that the person telling them it’s a bad idea is confused as well. In truth, reverse mortgage remain a largely misunderstood program, riddled with misconceptions. It’s important that the YOU feel comfortable with their decision. You should read the material they are given and sit down with a representative to ensure you know the in’s and out’s of the program before you make your decision.
I have enough income to live of off right now. The truth is, you might, RIGHT NOW, but what about the future? If it’s as unpredictable as some people say, should you take the risk? It’s important to consider your lifestyle, where your income is coming from and what steps you will need to take to secure a more comfortable retirement in the future. If the cost of living continues to rises, it might not be a bad idea to have an extra boost of cash flow in your pocket for the proverbial “rainy day.”
My kids will help me financially. It’s always great to think that your kids will help you out for in your later years, especially, when you helped them out when they were growing up. However, what if they have yet to get off the ground financially themselves? What if your kids are saving up to begin their own lives? What about your own independence? These are questions you should consider before saying no to a reverse mortgage and hoping your kids help you out later on.
I want to wait till I’m older. The older you are when you take out a reverse mortgage, the more money you get, that’s true. However, there are other factors to consider, namely, interest rates and home value. The higher the expected interest rate, the less money you’ll receive, regardless of age. In addition, the lower the appraised home value, the less money you’ll receive, regardless of age. In truth, the only constant variable in the equation is you age (because it can only go up) but consider other factors before you decide to wait.
At PS Financial Services, a reverse mortgage company in Florida, we offer all the reverse mortgage options available for a retiring or retired senior homeowner. Make sure your retirement is liberating, not suffocating. Give us a call at (888) 845-6630 or send us an email at info@PSReverseMortgage.com. We do not pressure those who inquire, we are simply here to help.