Medical care costs can become quite expensive for seniors who may be living on a limited income and for this reason many have begun turning to reverse mortgages as a way to get the funding they need to pay costs for medical treatment later in life. Yet, there are some who feel that refinancing a home through a reverse mortgage may not be in a homeowner’s best interest and argue that expenses like medical costs should not necessarily lead a homeowner to this type of mortgage.
Essentially, homeowners who have equity built in their home and are 62 years old may qualify for a reverse mortgage on their home, but counseling is typically required so that homeowners can explore all of their financial options and understand the impact that a reverse mortgage could have. Many homeowners who may have medical expenses that are beyond their means to pay often hear that a reverse mortgage gives them access to credit from their equity and doesn’t have to be repaid.
For homeowners who meet the qualifications of a reverse mortgage, they can gain funding from their home’s equity and are not required to make payments on their home as long as they keep that home as their principal residence, do not allow the property to deteriorate, and pay property taxes. Yet, a reverse mortgage is a form of debt and there can be problems that arise down the road.
It’s understandable that homeowners who have medical costs which must be met are happy to alleviate themselves of this financial burden, but if a homeowner is unable to remain in their home or claim their home as their principal residence, they must begin repaying the reverse mortgage. While a homeowner who obtains a reverse mortgage typically can have this mortgage repaid after they pass away and their heirs either sell their home or use other funds from their estate, some may find themselves in a difficult position which may cause them to be unable to fulfill the requirements of a reverse mortgage.
It’s true that reverse mortgages have helped senior homeowners with various costs later in life, but mortgage counselors often suggest that homeowners explore every option which may be available to them, before turning to a reverse mortgage. Again, medical costs can be difficult for seniors, but a reverse mortgage home loan isn’t right for every homeowner and should be thoroughly researched to see how it will affect one’s personal financial situation.