What is a reverse mortgage?
If you are a senior that owns a home, or have a senior parent or grandparent that owns a home, you have probably heard of a reverse mortgage. A reverse mortgage is a type of home equity loan for older homeowners. It does not require monthly mortgage payments. The loan is repaid after the borrower moves out or passes away. It’s also known as a home equity conversion mortgage, or HECM. It is a great tool that allows a home owner to recapture their equity without moving out. But is it the best move for you? For more information on reverse mortgages check out this article.
Are there any downsides to a reverse mortgage?
One problem is that a reverse mortgage pays you a monthly payment instead of a lump sum. Because the payments stop when the homeowner moves out or passes away, you run the risk of not getting all of the built up equity out of the home. This money could be passed on as an inheritance to children and grandchildren, but with a reverse mortgage it is lost. Because reverse mortgages apply to only those that are seniors, the mortgage companies are betting on the health of the home owner to fail before the full share of equity is paid out. Since health issues can come on suddenly as we age, if you have to move into a nursing home, assisted living facility, move in with family, etc. due to health issues those payments you have depended on to make ends meet will end. The remaining equity you had built up over years of home ownership is lost forever.
Is there a good alternative to a reverse mortgage?
If you are looking for an alternative to a reverse mortgage to get the equity out of your home, consider an As-Is cash sale of your home. Saint Louis Home Buyers can make you a no obligation offer that requires to repairs, inspections, or cleaning on your part. You get to avoid showings to buyers, paying REALTOR fees and commissions and get to avoid the stressful negotiations. We can close on your home within a week or we can agree to a price and close on your home months down the road. Because we make an all cash offer you don’t have to worry about the appraisal and loan approval process. This works great for those that want to get all of the equity out of their home, not some. And since we are so flexible with the closing date you don’t have to rush out of your home and you can take your time as you transition to your new living situation.
Again, a fast cash sale of your home is a great alternative to a reverse mortgage. Call Saint Louis Home Buyers today at 314-277-0999 to get the process started.