Should You Get A Reverse Mortgage Loan?
A reverse mortgage loan is a very useful financial innovation that can help many
seniors 62 and older to supplement their income with the help of their home. If you own your house or you have a low mortgage balance you can get a loan using your house that you would never need to pay back and you would be able to live there at the same time. The loan would be repaid after your death when the lender that gave you the loan sells your house. Anything that is left from the sale it goes to your heirs. Of course it is also possible for your heirs to decide to keep the house and repay the loan to the lending company or bank.
Although that may sound like a great solution, especially to those pensioners with a low income that have a need for that cash. You should consider all the possibilities before you apply for such a loan. First of all, you need to ask yourself if you need that money. It is very easy to start overspending when you feel that you have extra money, and things that a few weeks before seemed like luxuries to you to start seeming like necessities of life. Of course, if you had an unlimited supply of money that question would be moot, but the problem is that at some point in the future you may exhaust that loan and find yourself in a situation where you would be needed to learn to get by with less while your needs would increase due to old age.
Imagine a scenario that in 10 or 15 years in the future you consume all the loan and a medical emergency hit you, where you need to find extra money to cover medical bills. In that situation you would be in real trouble. Let alone that in most cases as someone ages more, his medical needs are increasing.
On the other hand, you may be able to live the rest of your life without the need for a reverse mortgage loan and leave your home to your heirs. And although it's a noble thing to leave something to your children after your death, wouldn't be more fair to you if you were able to use some of your financial assets like your home to live a more comfortable and enjoyable life. Imagine all the trips to any corner of the earth that you could make or other expenses that could improve the quality of your life. Why not use some of that money to live a better life and instead leave everything to the others? After all you have worked hard all your life to get them.
As you can see there is a fine balance between your current and your future needs, and you need to think over it very carefully before you decide to get a reverse mortgage. The sure is that you need to avoid both those opposite scenarios and find yourself somewhere in the middle where you would be able to enjoy the money that stay dormant as an equity in your home, while at the same time to not run out of them during your lifetime.
by: John Andrew
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