As with any financial decision, there are a lot of factors that need to be considered. Reverse mortgages are not a one size fits all arrangement. However, these are some of the primary considerations to ask yourself when deciding if a reverse mortgage will be right for you:
Needs and Wants: When trying to figure out, “should I get a reverse mortgage,” the most important consideration is whether you need (or want) additional funds for retirement. There is no question about it, a reverse mortgage gives you a lot of flexibility, financial freedom and choice.
Pay Off Mortgage: Would you live a more comfortable life if you could eliminate existing mortgage payments.
Efficient Planning: Even if you don’t need the money or improved cash flow now, you should think about whether an additional source of funds could be helpful at some point in the future. Many people get a reverse mortgage line of credit in order to increase their financial flexibility. The line of credit is an efficient way of setting up the reverse mortgage since you won’t pay interest until you withdraw funds.
The money is there if and when you need it.
Age in Place: You should only consider a reverse mortgage on your current residence if it is where you want to spend the rest of your life — or at least another 5 years.
Qualifications: To get a reverse mortgage, you must be 62, own your home, have sufficient equity and show adequate funds to maintain insurance and property taxes on the residence.