Sharing the Decisions
Second opinions are usually helpful. Who else should you involve? Perhaps you have a trusted friend or advisor who knows your circumstances, or someone who is generally good at figuring things out or discussing them with you. Perhaps it's your adult children. Perhaps not. Whoever you decide on, consider inviting them to the counseling session that is required for Home Equity Conversion Mortgage (HECM) applicants. They can be an important second set of ears.
And then there's the matter of your heirs. Do you seek their advice before deciding, wait until after closing, or never tell them? Whether or not you discuss this matter with your children or other heirs depends on a lot of personal and family factors. You may value their advice or want to know what they think. Or you may think it best not to discuss it before making your decision and want to wait until after you close the loan before telling them. Or perhaps you don't want to tell them at all.
Whatever you decide, one consideration needs to be the impact of a reverse mortgage on your heirs. A loan with "rising debt and falling equity" means there will be less equity left for your heirs. If you get a lot of cash over many years from the loan, there may be little, if any, left for them. So you need to think through how you want this to become known to your heirs.
Many children of reverse mortgage borrowers are pleased that their parents are able to use their equity and remain living in their homes. Often it is a great relief to these children that their parents are able to take care of their own needs; many even encourage their parents to do so.
Whatever you decide, the important thing is to give some thought to your heirs. If you decide not to discuss the matter with your heirs before or after your decision, you may want to make a note of your decision in your will to avoid misunderstandings.
Being Careful
Be cautious of anyone who seems eager for you to get a reverse mortgage. Be especially alert if that person just happens to have ideas about what you might do with the money you get. Watch out in particular for anyone trying to sell you something or to get your signature on an agreement to pay them for any purpose.
Remember, we call such people "con men" because they are very good at gaining our confidence and trust. It's sad but true that the stranger being so nice to you may be more interested in your equity than your well-being.
AARP does not endorse any reverse mortgage lender or product.
