Many homeowners become interested in reverse mortgages so they can stay in their own homes. Selling their homes and moving elsewhere are generally not very appealing to most older people.
The single best way to evaluate a reverse mortgage is to compare it to what may be your only real option: selling your home and using the proceeds to buy or rent a new home. Do you know:
- How much cash you could get by selling your home?
- What it would cost you to buy (and maintain) or rent a new home?
- How much money you could safely earn on any money left over after you buy a new home?
- Have you recently looked into buying a less costly home, renting an apartment, or moving into assisted living or other alternative housing?
Until you have seen and considered other housing options, how do you know that another housing choice wouldn't be better for you than a reverse mortgage? For your own peace of mind, look into what else might be available. It doesn't hurt to explore all your options before making a decision.
Most likely you will come to one of two conclusions:
- you may find another housing option that is a lot more attractive than you thought; or
- you may confirm what you were fairly certain of all along: that where you live now is the best place for you to be.
No matter what you conclude, you will have a much better idea of the overall costs—and benefits—of staying versus moving. That will give you a better sense of what is most important to you. And then it should be easier for you to evaluate the costs and benefits of a reverse mortgage.
AARP does not endorse any reverse mortgage lender or product.