Reverse Mortgage Alternatives

Getting a reverse mortgage is a life changing decision, even for a senior that is late in their life. Sometimes a reverse mortgage loan is the only option for one reason or another. We take a look at reverse mortgage alternatives for seniors in case they do have a choice.

Sell the Property

If the goal is to downsize into a smaller home or relocate, selling the home may be a good option. Keep in mind that the fees in selling the home can be anywhere from 5-10% of the property amount. Traditional real estate commision is 3% to the buyer's agent and 3% to the seller's agent. Of course, you may negotiate these figures.

Rent Out a Room

If cashflow is an issue, renting out one of the rooms within the home may be a good option. It can provide an extra income source while allowing someone to live out their life in their home.

HELOC or Refinance Mortgage

Getting a mortgage or a home equity line of credit (HELOC) requires verificable income and credit. The negative of a traditional mortgage versus a reverse mortgage, is that the mortgage needs to be repaid every month. A HELOC may be a good option if the need is for a safety net in case of an emergency. Many seniors will not be able to qualify for a traditional mortgage because of no verifiable income and turn to a reverse mortgage as a result.