Aging in the workplace is often a welcome retirement outcome for many older people who hope to stay home in their old age, but sometimes the costs associated with achieving this goal can be significant for a fixed income. According to a new NextAvenue article published on MarketWatch, reverse mortgages are one option an older person can explore to try and live up to the goal of aging in place.
“[Reverse mortgages get] “bad reputation,” said Sonia Edwards, broker and CEO of Branches Real Estate, a subsidiary of the Benjamin Rose Institute of Aging, in the article. “But not all of them are bad. [Y]You have to be in the perfect storm to really make reverse mortgages work. ”
The article states that the two main advantages of a reverse mortgage are that the credit requirements are not as strict as other home equity lending instruments, and that a reverse mortgage does not require monthly payments to pay off the loan.
“But as interest is added to the loan every month – and homeowners are not making payments – the balance on the reverse mortgage grows over time,” it said. “When the last borrower to sign up for a reverse mortgage dies or leaves home, the loan is due.”
The complexity of a reverse mortgage can often alienate a senior who is exploring this option, but that doesn’t mean that he should be completely ruled out if the senior who seeks it is provided with relevant information pertaining to his or her situation, the article says.
“Reverse mortgages are complex and complex,” says Edwards to NextAvenue. “I recommend talking to an experienced housing consultant before going down this route.”
According to the article, there are other potential related benefits that a reverse mortgage borrower may have.
“Seniors can also take advantage of specialized programs designed to cover the cost of home remodeling,” it says. “Many states and municipalities, for example, offer grants and low-cost loans to make homes comfortable for seniors, and some organizations provide funds for veterans to adapt their homes for free.”
Read article at MarketWatch.