Remember that old credit card commercial that enacted wonderful family events and examples of spending money that was ‘priceless’? That’s how I see reverse mortgages. The value of the many benefits reverse mortgages provide are often ‘priceless’. Or structuring a reverse mortgage in retirement planning that extends the retirement portfolio many years and reduces income taxes can be a smart financial decsion.
When I hear the objection that reverse mortgages are expensive tells me a few things. First, it tells me that person has not looked into the ‘new’ HECM reverse mortgage. When it is used as a financial planning tool where there the large initial draw is within 60% of the funds available, the cost is very affordable. Find out for yourself, request a reverse mortgage calculation and get current reverse mortgage interest rates.
When I hear people saying it would be less expensive to sell and move, that person obviously hasn’t sold a house in a long time and doesn’t realize the high cost of selling or analyzed the full cost of renting and unknown cost of future rent increases. Or if a senior wants to purchase a new home and they can use much less of their own cash or buy more home for their money, it's an incredible opportunity.
When an elderly person contacts me with a very strong desire to remain in their home but needs in-home care and family members object because they heard it was expensive, breaks my heart. The benefits of Reverse Mortgages ARE priceless, but are they really costly?
If you compare the costs to conventional mortgages, the answer is no, if you compare it to selling, the answer is no and if you compare it to making mortgage payments from taxable retirement funds and exhausting your nest egg, the answer is also .... NO! I emplore everyone to check it out, DO NOT RELY ON HERESAY! You may be pleasantly surprised!