Time for a Reverse Mortgage??

During the current economic downturn, we are all taking a fresh look at our cash position and plans for meeting expenses in the future. Even though we may have a great deal of equity in the home that we have owned for many years, that equity isn’t helping us pay our day-to-day bills.

Reverse mortgages are ways to tap some of that equity to help us through this crunch. You may be dealing with one of a variety of situations, but a couple that have been identified are:

1. You have been living off of your investments but find that, with the current market slide, you no longer have the cash flow to meet your needs. Thus, a reverse mortgage can be structured to add some cash inflow to make sure you meet your expenses.
2. You haven’t needed to tap your investments in the past but have been approaching the point where you will need to begin using those assets. However, now with the market down and your nest egg is at a smaller value than a couple of years ago, you are reluctant to dip into that pool of money that is much smaller than you expected, and you really want to wait. A reverse mortgage could give you the cash inflow to further delay drawing on your nest egg with the plan to let it again appreciate as the economy improves.

While nobody really knows what will happen with the economy in the near future, and I would be the last to make a guess, a reverse mortgage might just give you the flexibility to put together a strategy that better fits your needs and expectations.

Although reverse mortgages had some bad press when they first came on the scene, and there were some mistakes and abuses early on, the industry has developed much better guidelines and processes that make them a safer and more secure financial approach. So if you are disciplined, do your home work, and work with a reputable, experienced lender, a Reverse Mortgage might be a good strategy for you.

Please share any opinions and experiences by adding your comments.

Regards
Tom Binder