HECMs Aren't for Everybody
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As you know, we are big fans of the benefits and improved quality of life that a reverse mortgage can provide
for seniors. So, are reverse mortgages a panacea, the answer for all senior cash flow problems?
No. Although the HECM Reverse Mortgage is a remarkably flexible financial tool, no single financial product is a one-size-fits-all solution. After going through the education process, some potential borrowers discover that a HECM loan does not fit their unique life situation.
4 Reasons a HECM Loan Might Not be Right
- The HECM loan proceeds are insufficient to retire
the current mortgage, and the borrowers do not have enough cash resources to cover the short to close amount.
- The house you are in should be the home you plan to grow old in. Now, we all know how the best laid plans of mice and men can be altered, but if you plan on moving from your current home, obtaining a reverse mortgage now might limit your options in the future.
- It is important that the property stay in the family. When the loan becomes due, the home will have to be
sold if family members cannot raise the money to pay off the HECM lien.
- After the HECM is in place, the borrowers will still have insufficient cash flow to pay living expenses, property taxes and homeowners insurance.
These should be considered as guidelines. Every scenario is unique and there are exceptions to every rule.
Education is the key to answering the question:
"Is a Reverse Mortgage Right for Me?" |
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