Should You Get a Reverse Mortgage or Sell Your Home?

While a reverse mortgage can be an important tool to help keep your home, it’s important to decide whether it makes more sense to sell. Here are some important questions to ask when deciding whether or not you want to sell your home.

• Will you be better off financially if you get a reverse mortgage instead of selling your house? A reverse home loan allows you to convert some of your equity into cash. However, you may actually end up with more cash in your pocket if you are able to sell you home for its current market value. For instance, the Home Equity Conversion Mortgage (HECM) loan limit is $625,500. If your home is valued much higher than that you wouldn’t be able to tap that equity with a reverse mortgage.
• Are you willing to continue maintaining your home? It’s a lot of work to take care of a home. If you are unwilling or physically unable to make repairs and do other general upkeep you’ll need to hire someone for those chores. In some cases it makes more sense to sell a property than struggle to keep it up.
• Are you willing to pay fees to get a reverse mortgage? Expect to pay an origination fee, title insurance, appraisal fee, and mortgage insurance. These fees can total several thousands of dollars, although a real estate commission at 6% is likely to be more.

If you feel that your house is too large for your needs, you can always get an HECM loan and use it to downsize to a new home. Begin your search for reverse mortgage quotes here.

This entry was posted on Wednesday, September 16th, 2009 at 10:55 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.