7 Ways to Use a Reverse Loan

One of the reasons reverse mortgages are popular with seniors is that the money can be used for just about any purpose. Determining the right use of reverse loan proceeds is a crucial step in the information gathering process. When you talk with a housing counselor, it’s important to review exactly what you plan to do with the money. Take a look at some of the following suggestions for using a reverse mortgage.

1. Home repairs and upgrades. Fixi up your home to accommodate your physical needs or just bring it up-to-date can help you enjoy your golden years in comfort.
2. Wipe out debt. Almost 60% of people between the ages of 65 to 74 are carrying some type of debt. Paying off your debt can free up income for other expenses.
3. Pay for a long-term care insurance policy. The average life expectancy is 77.9 years, according to the Centers for Disease Control and Prevention. Living longer increases the likelihood of major medical bills.
4. Business start-up. Maybe you couldn’t wait to retire but now find yourself twiddling your thumbs more often than you care to admit. Launching a home-based business can get you back in the work world on your own terms.
5. Pay for medical care. Whether you have a chronic medical condition or just want to pay for routine check ups and prescriptions, reverse loan proceeds can help you manage these costs.
6. Downgrade to a less expensive home. You can use a Home Equity Conversion Mortgage (HECM) to purchase a different home as long as it is your primary residence.
7. Travel or enjoy hobbies. Having extra money each month could allow you to spend time pursuing hobbies or seeing the world.

Use Reverse Loan Proceeds Wisely

Getting a reverse home mortgage is a major financial decision that should not be taken lightly. Avoid borrowing money just to buy things you can probably do without. Talk with a reverse loan counselor to work through the best ways to use the money.

This entry was posted on Tuesday, August 3rd, 2010 at 6:12 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.