Many senior homeowners have begun researching reverse mortgage home loans as a way to acquire funding for a variety of expenses that may arise later in life. Obviously, seniors may have a variety of uses which funds from a reverse mortgage could help meet, but as to whether a homeowner should use a reverse mortgage to meet their financial needs has been a topic of debate for quite some time.
While the uses of a reverse mortgage may vary, there are no restrictions on how homeowners may, and have, applied these funds from their reverse mortgage home loan. Usually, common uses for funding gained from the equity that is accessed through a reverse mortgage are medical costs or simply as a way to erase debt, but homeowners may use their reverse mortgage for any financial need or use they may have.
However, while the uses of a reverse mortgage are typically not incredibly widespread among senior homeowners, the debate over whether the homeowner should obtain a reverse mortgage is one that comes down to a homeowner’s particular situation and their understanding of what a reverse mortgage entails.
It’s understandable that when a homeowner is burdened under debt, from sources like medical costs, various personal debts, or when funding may be needed for expenses like prescription drugs, the idea of reverse mortgage is very attractive to numerous senior homeowners. There are companies which advertise online and through television about the benefits of a reverse mortgage, but many financial advisers are quick to point out that a reverse mortgage is debt which must eventually be repaid, despite the fact that senior homeowners are not required to make repayments on a reverse home loan.
Seniors who meet reverse mortgage requirements will not have to repay their home loan, meaning if they pay their property taxes, keep their home in good condition, and remain in their home so that they can claim it as their principal residence, no repayment is required. However, homeowners may come upon a situation which necessitates that they relocate or if their home begins to lose value due to lack of upkeep, homeowners may be required to repay this debt.
Obviously, this could be quite costly for any senior who is living on a fixed income, so these are factors that homeowners who have considered a reverse mortgage in the past have had to weigh. While many reverse mortgages are repaid after a homeowner passes away and the home is sold or funds from the homeowner’s estate are used to repay this debt, this is not always a guarantee as, again, unexpected situations may arise.
Yet, it is true that homeowners may use reverse mortgage funds for almost any use in their personal life, but successful homeowners who have obtained a reverse mortgage are those who have been in a good financial position, in terms of their home’s equity, and have been in a situation where they can meet the requirements of a reverse mortgage so that repayment is not required in their lifetime.