If you’re 62 years of age or older, you are eligible to apply for a reverse mortgage. If approved, you can tap into all the equity you’ve been building up for decades. You can receive your proceeds in one lump sum payout or in equal monthly distributions. Or you can establish a line of credit.  

One thing is certain: some people approved for a reverse mortgage can potentially gain access to hundreds of thousands of dollars. The more appetizing part about the reverse mortgage is that you need not pay it back until you leave your house or you die (in which case your surviving family members will need to make arrangements for the payback).  

You can find out just how much of a reverse you qualify for by using this reverse mortgage calculator by Arlo (reverse.mortgage/calculator). According to the experts at the reverse mortgage company, your personalized results will also consist of information that will help you make an informed decision on the type of reverse mortgage you wish to qualify for, like real-time interest rates, annual percentage rates or APR, closing costs, and more.  

With that in mind, what are some of the experts saying about reverse mortgages in these trying financial times? According to a new report by CBS News, with the U.S. trying to cope with ongoing inflation, potential recession, and a monstrous debt ceiling, many people are going over their budgets to see where they can work up some extra money.   

For homeowners 62 or older, the reverse mortgage might be the answer.  

Pros and Cons of a Reverse Mortgage 

If you’ve paid off your home and wish to supplement your retirement income, a reverse mortgage can help. It assists you in gaining access to all that equity you’ve spent years building up without requiring you to sell your house or repay the loan until you pass away or move.  

There are some potential drawbacks to reverse mortgages, however. Says one certified estate planner, poor loan terms can inevitably place the homeowners and their heirs at risk of losing both a place to live and money.   

The Pros of a Reverse Mortgage: 

-It will supplement your retirement income.  

-Payments aren’t due until you move or die. 

-It can provide protection against loan costs that exceed the home’s real value.   

-The home’s equity can be liquified without having to sell.  

The Cons of a Reverse Mortgage:  

-You can lose your heirs inheritance by spending all your home’s equity. 

-HOA fees, homeowner’s insurance, property taxes, etc. are still the responsibility of the homeowner.  

-The home must remain your primary residence, or the bank will insist you pay the loan back in full.  

Here’s Why a Home Mortgage Might Be Worth it For You 

According to a property management expert and realtor, a home mortgage is worth it if the homeowners meet these requirements: they have built up lots of equity in the home, they plan on living in the family home for at least five years or for good, their present income (including Social Security) isn’t enough to meet their monthly expenses, and they don’t have other sources of income that will help with covering all the costs of living.  

The property management expert also says, reverse mortgages might also be a good idea for homeowners who plan on using the additional funds to invest in stocks, Bitcoin (despite the volatility), purchase annuities, property, or in another guaranteed income stream like a small business you can work at from home.   

Says the president of a prominent mortgage team, some people think of mortgages as a last resort. But this isn’t even close to the truth. Lots of reverse mortgage clients already have significant assets and net worth. When the market is down, they can leverage their equity by using the proceeds from a reverse mortgage rather than selling the investments to turn them into quick cash.   

If you’ve been living in your home for decades, it has significantly appreciated in value, and you plan on living there until you die, why not apply for a reverse mortgage? At the very least, explore your options by seeing just how much of a reverse mortgage you qualify for. The numbers might be too good to refuse.   

Photo by RDNE Stock project: https://www.pexels.com/photo/a-close-up-shot-of-an-agent-pointing-rates-with-a-ballpen-8292880/