A reverse mortgage is a creative way to refinance your home's existing equity; if you meet the age requirements of 62 and own your home with a low payoff balance. But how do you know if one is right for you?
There are plenty of reasons why older Americans look to a reverse mortgage. Since each person and situation is different from the next, the reasoning behind this decision does vary widely. We'll help you decide whether or not a reverse mortgage is the answer for your situation by providing seven classic examples of why a person may consider taking one out.
Strapped For Cash
According to Dallas News, one of the commonest reasons to consider a reverse mortgage is simply due to a shortfall of cash on hand. The inability to make ends meet denigrates your quality of life. Looking to cash out some of your hard earned equity is a surefire solution.
Insecure Retirement Funds
A lot of older Americans rely solely on their retirement income to meet their monthly obligations. But sometimes this income simply is not enough. Rather than having to make drastic changes to your lifestyle, a reverse mortgage is also a prime consideration.
Looming High Interest Debt
If you are wallowing in high interest debt, like charge cards or credit card debt, a reverse mortgage is a veritable consideration. You'd have the chance to consolidate this debt into a loan with a locked interest rate, one that you do not make any payments on while you are alive.
Rising Medical Bills
Medical bills are enough to make anyone go broke. The healthcare system in this country is not getting any cheaper, either. For older Americans who are suddenly hit with a large hospital bill, a reverse mortgage can be a fast way to get it paid down.
Behind On Monthly Obligations
If you are already behind on your monthly payments, you can consider a reverse mortgage. Since these loans are not credit or income based, they are a realistic option for getting back on track with your budget.
No Retirement Nest Egg
If you do not have a retirement nest egg stashed away, it's never a bad consideration to look at your home's equity. The ability to cash out a large portion of it can enable you to secure your retirement without having to compromise the quality of your life.
Fixed Annual Income
Most old Americans are living on a fixed income. But this does not always leave much wiggle room for anything else. If you have grown tired of having to be fickle with your budget, a reverse mortgage could be the solution that you've been seeking.