August 2010 - Reasons to Get a Reverse Mortgage - Historically, people have sought reverse mortgages as a way to make ends meet, as they balance the costs of health care, housing and other basic needs in their retirement years.
But in today's housing market, it has become more common to see people using them to eliminate their monthly mortgage payments.
People who, in a more normal environment, might have sold their home and moved to a different type of housing. But since they can't sell their home in this environment, they're using a reverse mortgage to sustain themselves in the home until they can sell it.
Some distressed homeowners also are finding relief in reverse mortgages. For others at risk of foreclosure, it could be a lifesaver. They could risk losing the house, and if they can defer mortgage payments, it makes sense.
Still, a reverse mortgage isn't right for everyone. For one, it probably makes the most sense for people planning on staying in their homes for more than a few years. If this is a short-term financing situation, you might have other options that you can consider.
On top of the mandatory counseling for an FHA-insured reverse mortgage, Its not a bad idea to go through pre-lender counseling as well; you can get help via searching for a HUD-approved HECM reverse mortgage counselor at hud.gov. You can also visit the National Council on Aging's BenefitsCheckUp.org site, which helps seniors find financial assistance in their areas, sometimes eliminating the need for the extra funds.
