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alternatives to reverse mortgages

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Introducing a new and innovative way of putting your commercial and residential property to work. If you are 65-85 years old discover an easy way ...

9 Alternatives To A Reverse Mortgage: Other Ways to Meet Retirement Expenses

A reverse mortgage allows you to convert the equity in your home to cash that you can use for other purposes. Essentially, you're selling your home back to a lender in increments.

It's a popular method for seniors to supplement living expenses. Repayments don't begin until the owner permanently moves out of the home, passes away, or transfers ownership – as long as the home is maintained and property-related bills (taxes and insurance) are paid.

However, reverse mortgages have downsides, including equity-reducing fees and potential financial burdens to heirs – not to mention running out of equity before you run out of expenses. Consider these alternatives to a reverse mortgage before you commit.

1. Selling/Downsizing –  Instead of selling in increments, why not sell all at once? You'll probably receive more of your equity and can use some of those funds toward  alternate housing .

2. Selling to a Family Member –  If a family member is willing and financially capable, you can work out an arrangement to sell your home to that family member while they allow you to stay in the home. Put the terms in writing, or risk family arguments and confusion about obligations.

With reverse mortgages, new options are available for homeowners

You’ve probably seen actor Tom Selleck suavely pitching federally insured reverse mortgages on television and thought, hmm, that sounds interesting. He says you can turn your home equity into cash and not pay back anything — no principal, no interest, no fees — for years after your retirement.

And it’s true: Some form of a reverse mortgage could be a good choice for you, but it might not be the government-backed type Selleck is hawking. Those loans have hit tough times, and growing numbers of lenders have begun offering alternatives — proprietary, nongovernment reverse mortgages, including an innovative variant unveiled last month that allows owners to retain their current low-interest-rate regular mortgages while pulling out additional funds via the industry’s only “second-lien” reverse loan.

A little background: Annual volumes of the Federal Housing Administration’s reverse mortgages have tanked to their lowest level in 13 years and appear headed for further declines. The program is a financial nightmare for the FHA, performing so poorly that the FHA’s commissioner, Brian D. Montgomery, complained recently that it is “still hemorrhaging money,” despite repeated reform efforts.

Are there any alternatives to Reverse Mortgages?

My gram is 63 and is paying her mortgage every month but doesn't have much else left over. She owes $179,000 on a house worth $210,000 in this market. Is there any alternative to a reverse mortgage where she wouldn't have to make a monthly payment?

sell the house and move into a senior apartment that she can afford. she'll have SS income when she retires. she should put the proceeds from the sale of the house into an investment vehicle appropriate to her age, need for cash, etc.

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