A recent study from the Urban Institute found these 5 key reasons that many people avoid reverse mortgages.
1. Desire to Avoid Debt
Researchers found that seniors “tend to have a general desire to stay financially conservative and avoid debt in old age.”
While avoiding debt can be prudent, the right kind of debt can also be a powerful financial tool to enhance your overall financial well being.
Reverse mortgages are definitely loans and you do accumulate debt. However, you are borrowing your own home equity. You have worked very hard to buy your home and pay off or reduce your mortgage. There is no reason to feel bad about tapping this money.
In fact, you probably saved less for retirement exactly because you needed to pay down your mortgage.
Furthermore, reverse mortgages are a very different kind of debt than say paying with a credit card. Many personal finance experts who would sternly tell you to avoid credit cards would also highly recommend a reverse mortgage in the right circumstances.
Learn more about the pros and cons of reverse mortgages.