Reverse Mortgages Could Help Seniors Struggling with Bills

Hundreds of thousands of seniors are having a difficult time because of the financial crisis. More than 600,000 seniors are delinquent or in foreclosure, according to AARP. For some seniors, a reverse mortgage could help them keep their homes and weather the economic storm.

Your Personal Bailout
AARP found that 25.5 million people over 50 have a mortgage, and many of them are on fixed incomes, making it difficult for them to catch up on missed payments. Even if you’re still making mortgage payments you could qualify for a reverse mortgage loan if your home equity is significant. If you already own ar home free and clear but have seen your retirement nest egg dwindle because of the financial crisis, a reverse mortgage could be the thing that allows you to continue living comfortably.

Why Use a Reverse Mortgage?
Not everyone has the same financial situation. But many people who take out reverse mortgage loans do so because they’ve encountered huge medical bills or other unexpected expenses. Other people use the cash from their reverse mortgage to pay for long-term care insurance. It’s not a good idea to take out a reverse home loan to pay for your kid’s college education.

Is a Reverse Mortgage Right for You?
So how do you know whether a reverse mortgage is a smart move in today’s economy? Ask yourself a few questions:
—Are you behind on mortgage payments but have a lot of equity in your home?
—Do you own your home free and clear but are struggling with medical or other large bills?
—Are you struggling with tax payments even though you own your home outright?
—Are you at risk of filing for bankruptcy or foreclosure?

Getting a reverse home loan is one possible solution to your financial woes. But it’s important to consider all the unique details of your situation before jumping into a reverse mortgage. Taking out a reverse home loan could cut into the amount of inheritance you wish to pass on to your kids. Also, over time the amount of equity you have in your home will fall. And last, even if you get a reverse mortgage, you’ll still need to budget your money wisely.

This entry was posted on Thursday, June 18th, 2009 at 2:32 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.